Sarah borrows a car for $45,000 from her local bank. It accepts a loan term of 60 months at a rate of 5.27%. The credit agreement stipulates that she must pay 855 $US on the 15th of each month for the next five years. The credit agreement states that Sarah will pay interest of $US 6,287 during the term of her loan and also lists all other costs related to the loan (as well as the consequences of a breach of the credit agreement by the borrower). After reading the credit agreement thoroughly, Sarah accepts all the conditions described in the agreement by signing it. The lender also signs the credit agreement; After the contract is signed by both parties, it becomes legally binding. Institutional credit agreements usually include a lead underwriter. The songwriter negotiates all the terms of the credit transaction.

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