Josie decides to buy a large house so she can divide it into apartments and rent them out. To make this purchase, however, she will need to get a large loan, placing her in debt to the bank. Why would Josie willingly go into debt to the bank?

Question

Question 2 options:

A)

Josie believes that she will make enough money to easily repay the loan.

B)

The purchase will lower the taxes that Josie must pay to the government.

C)

Josie will be able to use her credit cards to pay off the loan if the apartments are not rented.

D)

The bank will raise the interest rate on Josie's savings account if she takes out this loan.

Answer 1

The most logical reason for Josie to willingly go into debt to the bank in this scenario would be:

A) Josie believes that she will make enough money to easily repay the loan.

This option suggests that Josie has a plan to generate income from the apartments, which would allow her to manage her debt effectively. The other options do not provide strong or realistic reasons for taking on debt.