Renita works as a freelancer. she wants to start her own business, but she does not have the required funding. to meet the working capital for her business, she takes a short-term loan from a bank. the bank agrees to provide her funding up to $50,000, as and when she needs it. however, she can repay the amount immediately or over a pre-specified period of time. which of the following short-term financing sources does renita utilize to fund her business in the given scenario? a. line of creditb. trade creditc. commercial paperd. factoring

a. line of credit

Explanation:

Line of credit is means of short term financing wherein a borrower can utilize a credit limit upto which he can borrow money.

Line of credit defines the maximum amount a borrower can draw. For e.g a credit card is similar to line of credit

It is a flexible mode of financing since it allows a borrower to draw out as much and as frequently until the credit limit is reached.

Also, it allows the borrower to repay the money immediately or within a specified period of time.

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.