An equipment-hire business has a variable-rate loan. Its monthly loan cost changes only because of the interest rate rise. All other revenue and costs remain unchanged.
| Item | Amount |
|---|---|
| Loan balance | £48,000 |
| Annual interest rate before the rise | 5.25% |
| Annual interest rate after the rise | 7.25% |
| Amount available for investment each month before the rise | £650 |
Calculate the amount the business will have available for investment each month after the interest rate rise. Show your working.
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.