F1 to F2 Mathemetics

......Loan..............Cash rebate from Bank A..........Cash rebate from bank B

...\$100 000........................ \$0.................................... .\$4000

...\$200 000.........................\$0......................................\$8000

...\$500 000.................\$20 000...................................\$20 000

...\$800 000.................\$20 000...................................\$32 000

\$1 000 000.................\$50 000...................................\$40 000

Update:

\$1 500 000.................\$50 000...................................\$60 000

\$2 000 000...............\$120 000...................................\$80 000

\$3 000 000...............\$120 000..................................\$120 000

Update 2:

\$4 000 000...............\$120 000..................................\$160 000

Which bank provides a better offer? Explain your answer.

[Note: You should consider different loan amount.]

1 Answer

Rating
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Lv 5
1 decade ago
Favorite Answer

Ha..... your question is simple and straight-forward ar.... it is very easy!

The only criteria for comparing their loan offer is the amount of cash rebate (as it is the only information provided). The higher the cash rebate amount, the better the offer.

Case 1: Loan: \$100 000......... Bank B offer is better

Case 2: Loan: \$200 000......... Bank B offer is better

Case 3: Loan: \$500 000......... Bank A and Bank B the same

Case 4: Loan: \$800 000......... Bank B offer is better

Case 5: Loan: \$1 000 000...... Bank A offer is better

Case 6: Loan: \$1 500 000...... Bank B offer is better

Case 7: Loan: \$2 000 000...... Bank A offer is better

Case 8: Loan: \$3 000 000...... Bank A and Bank B the same

Case 9: Loan: \$4 000 000...... Bank B offer is better

To summary, in 5 out of 9 cases, Bank B offers better; in 2 out of 9 cases, Bank A and Bank B offer the same; in 2 out of 9 cases, Bank A offers better.

Obviously, Bank B provides a better offer!

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