22. Financing a loan

You’d like to purchase a car but do not have the entire amount of money needed. You intend to borrow some money. It should be said that borrowing money to buy an expensive item has become more and more common nowadays. You understand that borrowing intelligently requires an understanding of the three basic steps to negotiate a loan. Firstly, you should compare loan sources. Secondly, it is necessary to compute interest. Thirdly, you should determine repayment time. If all other factors are equal, your choice will depend on which source will charge the lowest rate of interest. In my opinion it is important to understand the two basic method of figuring interest – simple and compound. Let’s explain these methods. It is the usual practice that repayments are made monthly from a current account. As to interest, using the simple interest method, the borrower repays the principal-the amount borrowed-and interest in one single payment to the lender. You have roughly calculated all the costs which will inevitably arise. But let’s pay our attention to the next method. The repayment schedule for most loans actually is calculated by using compound interest – the add-on method. Payments are broken into parts and one portion of interest and principal is paid back each month. Using this method the borrower must know the annual percentage rate or total finance charge on the loan rather than just the loan interest as in simple interest. Monthly repayment of the principal and interest increases the annual percentage rate. You add that by law the lender must tell the borrower the rate. You finalise that using the APR as a guideline, borrowers can more easily decide which loan is best suited to their purposes.

23. “Harper & Grant Ltd.” The history of the company. The company’s structure and development.

The company of Harper & Grant Ltd. was started forty-two years ago by Ambrose Harper and Wingate Grant. Wingate Grant died many years ago, and his son Hector is the present Managing Director. Ambrose Harper is the Chairman. He is very old man and he comes to attend the board meetings and keep an eye on the business.

The company started by making steel wastepaper bins for offices. These wastepaper bins are safer than the old type of basket made of cane or straw. Wingate Grant captured a big contract with government offices.

From wastepaper bins, Harper & Grant began to manufacture other items of office equipment: desks, chairs, cupboards, filing cabinets and smaller objects, such as filing trays, stapling machines and so on, until now when there are fifty-six different items listed in their catalogue. All items are made of pressed steel.

The factory consists of departments. These are divided into the Tool Room, Works Stores, Press Shop, Machine Shops, Assembly Shop, Paint Shop, Inspection, Packing and Despatch Departments. There is also the Warehouse.

The firm has a history of slow, steady growth. But Peter Wiles - Production Manager, and John Martin - Sales Manager think that they should be more adventurous. They want modernizing a business by using modern things to run a business. Harper & Grant Ltd., like their rivals, must get right up-to-date and enlarge their business, or they will be outpaced by a firm whose business organization is better than their own.