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Edexcel IGCSE Business Studies 1.6.3 Effects of Interest Rates on Businesses and Consumers Questions

Practise applying interest rate changes to borrowing, repayments, consumer spending and business decisions in case studies.

Syllabus
First assessment 2019
Course
Business Studies 4BS1

Exam points

  • calculate loan interest from a percentage rate and show the working clearly
  • analyse how higher interest rates affect loan repayments, sales and cash flow
  • evaluate a rate rise or fall using AO2 case evidence and short-term consequences

Edexcel IGCSE Business Studies 1.6.3 Effects of Interest Rates on Businesses and Consumers Questions question 1

[Maximum number: 6]

Artify Studio was set up in 2015 by Tay Hui Jae in the busy Kampong Glam area of Singapore. Artify Studio's aim is to have 'a communal art space where people can come together and paint, where people would be given as much creative freedom as they would have if they were in their own spaces.'

Artify Studio provides many services including its popular Liberty Art Jam where customers can paint as well as listen to music. The studio offers a Corporate Art Jam and Regular Kids Classes. Customers can purchase art materials after attending the studio.

Artify Studio is a profit-making organisation with a social element. It employs seven part-time people, all of whom are art enthusiasts.

Analyse the effect of a decrease in interest rates on Artify Studio.

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