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The table below summarizes the information that was on their applications.

\begin{tabular}{|l|c|c|}
\hline \multicolumn{2}{|c|}{Application information} \\
\hline \multicolumn{1}{|c|}{Questions} & Harold & Elaina \\
\hline How many years have you had your job? & 3 & 7 \\
\hline What is your monthly salary? & [tex]$\$[/tex] 2,600[tex]$ & $[/tex]\[tex]$ 2,250$[/tex] \\
\hline How many credit cards do you have? & 2 & 6 \\
\hline How much debt do you have? & [tex]$\$[/tex] 3,000[tex]$ & $[/tex]\[tex]$ 12,000$[/tex] \\
\hline \begin{tabular}{l}
How many times were you late with payments on credit \\
cards in the past year?
\end{tabular} & 1 & 8 \\
\hline
\end{tabular}

Who will get the better loan rate from the banker and why?

A. Elaina because she has more credit cards available to her.
B. Elaina because she has had her job longer, which makes her look more stable.

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Answer :

GinnyAnswer
To determine who will get the better loan rate from the banker, we need to evaluate the stability of both Harold and Elaina based on the provided information. Here is the detailed step-by-step solution:

1. Years at Job:
- Harold has been at his job for 3 years.
- Elaina has been at her job for 7 years.
- Analysis: A longer tenure at a job typically suggests greater stability and reliability in income. Therefore, in terms of job stability, Elaina is more stable as she has been at her job for a longer period (7 years) compared to Harold (3 years).

2. Monthly Salary:
- Harold's monthly salary is [tex]$2,600. - Elaina's monthly salary is $[/tex]2,250.
- Analysis: Although Harold has a higher monthly income than Elaina, salary alone isn't the sole criterion for determining stability and the ability to make loan payments.

3. Number of Credit Cards:
- Harold has 2 credit cards.
- Elaina has 6 credit cards.
- Analysis: A higher number of credit cards could indicate more sources of debt if not managed properly. However, it can also mean better credit accessibility. We need more context to fully evaluate this parameter alone.

4. Amount of Debt:
- Harold has [tex]$3,000 in debt. - Elaina has $[/tex]12,000 in debt.
- Analysis: More debt usually implies more financial burden, making it harder to ensure timely payments. In this case, Harold is in a better position.

5. Late Payments:
- Harold has been late with payments once in the past year.
- Elaina has been late with payments eight times in the past year.
- Analysis: Frequent late payments negatively affect creditworthiness. Harold is more reliable in this aspect as he has fewer late payments.

Considering the above factors:

- Most Important Factor (Job Stability): The number of years at a job highly influences perceived stability by lenders.
- Result: Elaina, having been at her job for 7 years as opposed to Harold's 3 years, appears more stable in the most critical aspect (job stability).

Therefore, based on job stability, the banker is likely to view Elaina as the more stable candidate despite the other financial concerns she has. This is reflected in the conclusion:

- Conclusion: Elaina will get the better loan rate from the banker because she has had her job longer, which makes her look more stable.

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