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#economics

Trust

Trust is a three-party arrangement whereby a trustor delivers property to the other party (trustee) to be held for the benefit of the third party (beneficiary). A testamentary trust is arranged by a will and arises after the death of the trustor.


What are the benefits of having a trust?


1. Put conditions on how and when your assets are distributed after you die.
2. Reduce estate and gift taxes.
3. Distribute assets to heirs efficiently without the cost, delay and publicity of probate court. Probate can cost between 5% to 7% of your estate.
4. Better protect your assets from creditors and lawsuits.
5. Name a successor trustee, who not only manages your trust after you die, but is empowered to manage the trust assets if you become unable to do so.


Start rate

Start rate is the beginning interest rate of an adjustable-rate mortgage (ARM) loans, it is the interest rate for the first period, as the ARM rate will be adjusted in subsequent periods. The start rate is usually lower than current market rates, in order to help the applicant qualify for a larger loan amount.


3-2-1 and 2-1 buydowns are two common mortgage buydown structures. In a 3-2-1 buydown, the buyer obtains a lower interest rate for the first three years. In a 2-1 buydown, reduction is only available for the first two years.

Interest rate

An interest rate is the percentage of principal that is charged as interest for its use by the lender. An interest rate is typically defined as an annual percentage of the borrowed principal and is calculated by dividing the amount of interest by the amount of principal.


Interest Rate = Amount of Interest / Principal
Amount of Interest = Interest Rate x Principal


For example, if the interest rate is %5 for $100,000 loan
Amount of Interest = (5 / 100) x 100,000 = $5,000 for each year.

GDP

GDP is an acronym for "Gross Domestic Product" in economics. GDP refers the economic growth in a country.


Gross Domestic Product (GDP) is the total value of goods and services produced by a country in a year. Gross National Product (GNP) measures the total economic output of a country, including earnings from foreign investments.


The growth rate is calculated by comparing gross domestic product (GDP) in a year with the GDP in the previous year.


:: More Info ::
Countries' GDP rates in years

Economic growth

Economic growth refers the steady growth in the productive capacity of the economy, such as an increase in the number of goods and services over a period of time.


In a simpler manner, economic growth is how much more the economy produces than it did in the previous period. The growth rate is calculated by comparing gross domestic product (GDP) in a year with the GDP in the previous year.


Gross Domestic Product (GDP) is the total value of goods and services produced by a country in a year. Gross National Product (GNP) measures the total economic output of a country, including earnings from foreign investments.


:: More Info ::
Countries' GDP rates in years

demand

Demand is the consumer's need or desire to own the products or services.
An increase in automobile prices may lead to a decline in demand for gas.