online games, multiplayer games
Simcountry is an Online Digital World where you are the President of a country.
No download needed!
What is Simcountry?
Beginners Info
What is Simcountry?

Why pay back loans? (White Giant)

Simcountry: Simcountry Bulletin Board  Why pay back loans? (White Giant)

Adam Baxter (White Giant)

Saturday, November 06, 2004 - 03:01 pm Click here to edit this post
Athena is right.
If I have a 4% loan due in 10 years, I can either:
Spend 10.5 B to pay off the loan - income from loans will equal 0, cost of loans will equal 0.
Loan out 10 B for 10 years - income from loans will equal 33 M per month, cost of loans will equal 33 M per month, the debt will be paid off when it comes due.
Either way I would make a net profit/loss of 0 per month, the only difference is that I would have paid an extra 500 M to pay the loan off early.
The only ways I could be worse off would be if the loan was higher than 4%, or if I had to take out another loan for higher than 4% because of keeping that debt around.

Simcountry Introduction