Topic Sentence

Topics: Money, Mortgage loan, Interest Pages: 1 (351 words) Published: May 2, 2011
Interest Rates

Write two paragraphs with about how interest rate affects our purchasing decisions.

Paragraph One

Changes in interest rates can have positive and negatives effects. According with the interest rate that we have is the amount of money that we are going to paid every month for a loan. If we have a high interest rate we have a high monthly payment, and we need to make sure that we can afford that. If we have a low interest rate our monthly payment is less. If the interest rates change the incentive for individuals to take out loans to buy goods will also change. In the interest falls for example, then the charges for a loan to buy larger items likes cars, furniture, electrical equipment, and so on, is also likely to fall. As a result more people might be willing to buy such items and the business selling these items might see and unexpected rise in demand for their products. Equally, if the interest rate rises, people might be put off buying things, since it is now more expensive to pay back the loan. Business selling the same products above, might see and unexpected fall in the demand of their products. For the individuals and for the business the changes in the interest rates can have a big impact in their financial situation. Paragraph Two

Further effects of changing interest rates can affect our mortgage. For many of us, the mortgage payment is the biggest single monthly outgoing and houses are not paid off quickly either. For many homeowners therefore, the interest rate it is important as it affects how much money we have to pay for the loan on our home and therefore what we have left over to buy others thing like food, clothing, entertainment an so on. If interest rise, we might expect some householders to cut back their expending on others goods and services. When mortgage rates changes, households notice, and may adjust their spending on other things as result. If interest rate change...
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