A commercial bank reduces the annual interest rates on three of its products.
| Customer and decision | Previous annual rate | New annual rate |
|---|---|---|
| A worker has received a bonus and is choosing between an easy-access savings account and buying a bicycle. | 4.5% | 2% |
| A household is considering a personal loan to pay for a kitchen extension. | 10% | 6% |
| A printing business is considering a loan for a new press expected to provide an annual return of 7%. | 9% | 5% |
Analyse how the revised rates may change the decisions made by these customers.
82 exam-style questions on OCR GCSE Economics 2.8 The role of money and financial markets, covering 2.8.1 Money as a medium of exchange, 2.8.2 Role of the financial sector, 2.8.3 Importance of the financial sector, 2.8.4 Interest rates and saving, borrowing, investment, and 2.8.5 Effect of interest rate changes. Each one has a worked solution and a mark scheme showing where the marks go.