Write two (2) causes of a debt. List three (3) items that can be considered as an asset to be presented to the bank.

Borrowing allows individuals or businesses to acquire assets or funds they don't currently possess, enabling them to meet immediate needs or invest in future growth.

• Advantage: Allows for the acquisition of large assets (e.g., a house, car) or funding for investments (e.g., business expansion) that would otherwise be unaffordable.

Borrowing comes with the obligation to repay the principal amount plus interest, which can add to financial burden and risk.

• Disadvantage: Involves interest payments, increasing the total cost, and creates a financial obligation that can lead to debt if not managed properly.

Debt arises when one party owes money to another. This can be due to spending beyond one's current income or making large purchases.
A. Overspending or living beyond one's means, leading to reliance on credit cards or loans for daily expenses.
B. Unexpected emergencies or large expenses (e.g., medical bills, car repairs) that are not covered by savings.

An asset is something of value owned by an individual or company that can be converted into cash. When presented to a bank, these are often used as collateral to secure a loan.
A. Real estate (e.g., land, a house, commercial property).
B. Vehicles (e.g., cars, trucks, machinery).
C. Investments (e.g., shares, bonds, fixed deposits).