How do you find the uncertainty of measurement after finding logarithms?

Answer 1

Theory:

Credit - this is the different ways in which a business can borrow money. Long term or short term.

Cost of borrowing for small businesses - interest is the price to pay to borrow money. Rates change often. As they increase costs increase on loan payments unless it is a fixed rate agreed when the loan is made. A fall in bank interest rates should benefit firms because the amount of interest they pay out should fall.

Interest rates - the bank of England set the base rates for the country. These then affect banks and determine the interest on loans, overdrafts, savings and mortgages. This then affects small businesses. They are keeping base rates low so businesses consider taking a loan. This then enables them to expand and possibly attract more customers and therefore increase profit. This is good for the government as they gain more money off taxing the businesses.

If the interest rate goes up, businesses whom have taken out a variable rate on mortgages will find their variable costs increasing. Yet a variable rate repayment method means that if the interest rate decreases, so does the amount they must pay back on interest for the mortgage. This then means there is a lot of risk involved when deciding whether to choose a fixed or variable rate. Fixed rate gives owners certainty. Variable costs give uncertainty as they may unexpectedly rise and cause costs to rise considerably.

This also applies to bank loans and overdrafts.