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Messages - meagher79

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Airline Alliance / Re: granduer air league
« on: May 29, 2020, 02:49:41 pm »
I'm Sky Chariot, and I just applied.  I am a newer airline with a lot of low-volume routes to smaller US cities.  HQ in Salt Lake, hubs in El Paso, Pittsburgh, and (for now) Springfield (MO).  I won't be earning any champion points, but I give access to untapped markets if I can link up with allied hubs in bigger cities.  It looks like Grandeur could really use Trans-Atlantic flights.  I don't have the capital for that though.  I hope I'm accepted, and we can grow to be a major player on both sides of the Atlantic.

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The key point is that the interest is charged each year regardless of the length of the loan.  Let's take a very simple example using "simple interest" instead of compound interest.  A $100 loan for one year at 10% interest would = $110 total repayment as you said, but a $100 loan at 10% interest for 5 years would = $150 because there is 10% interest each year. 

The situation you describe with the 5 year loan does not reflect the circumstances because the borrower gets the full $100 at the beginning and gets to use the $100 for five years (less the amount repaid over time which does reduce the interest). 

Maybe think of the 5 year loan as a series of one year loans.  Suppose on Jan. 1 of 2010, I borrow $100 to buy an airplane part.  On Jan. 1, 2011, I owe $110, but I'm not ready to repay, so I pay $10 interest, but I borrow another $100 to repay the first loan.  The first loan is done, but on Jan 1, 2012 I owe $110 for the second loan.  Again I get a new loan to repay the old one.  Each year I have to pay $10 for the use of the $100 I continue to have borrowed.  A five year loan just combines this process.  (Actually it gets more complicated depending on the repayment schedule and compounding interest.)

Try playing around with a loan calculator such as this one: https://www.calculator.net/loan-calculator.html
You are using the first option: Amortized Loan, where the principle is paid off gradually over the life of the loan.  As an example I looked at a $100,000 loan for 260 months in game.  The total repayment was $124,100 (which the game calls 24.1% interest rate, actually its the total interest)  I played around with the interest rate until I got the same total repayment and it was 8.85%

A very simple solution would be to just eliminate the shorter loans (they are a terrible deal compared to the 5yr), and change the "interest rate" label to "total interest percentage" as I suggested.  The actual 5 yr loan rate seems pretty reasonable. 

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I just realized that the interest rate listed for loans is the total interest for the duration of the loan not the annual percentage rate (APR).  That means that 5 year loans actually have a much lower interest rate than 1 year loans!  There is no reason to ever take a shorter loan as it is.  An easy fix would be to change the label for "interest rate" to "total interest percentage" and then increase the interest on longer loans and/or decrease it for shorter loans.  Generally lenders require a higher rate for a longer loan because of the increased risk and because their money is tied up for longer.

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General Discussion / Re: best domestic airplane ?
« on: May 20, 2020, 08:35:39 pm »
I am a new player, but based on the stats, I would say the A318 is far too expensive for the number of seats, and it has way more range than you need for most domestic routes.  The Boeing 737-100 is very cheap by comparison and has almost as many seats, though it burns more fuel.  The 737-700C or Bombardier CS100 would be a good replacement if you need  long range and good fuel economy.  If you want a bigger plane, consider the MD-81 or the A20.  In real life I think 737s and A20s are very popular, but I don't know what is best in the game.

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General Discussion / How to bankrupt a small airline fast
« on: May 20, 2020, 07:55:38 pm »
I love this game so far, but I got off to a rocky start.  For my starting company I chose the middle option "a modest start" or something like that.  I hoped that having a small fleet and some reputation would let me get off to a faster start.  I put my HQ in Salt Lake City (SLC) and opened routs with no direct competition.  I quickly used up all my slots at SLC, but I still had many idle planes.  I thought, "I need to grow quickly with so many planes to maintain and a debt load to carry.  There must be a way to use all these planes."  So I looked for a way to increase my slots at SLC and saw the "upgrade base" button.  Now a more prudent CEO would have checked the price, but I let enthusiasm get the better of me.  The next thing I knew, all my cash was gone, my expenses were even higher, and I still only had 20 slots.  :(  So I did what any good airline does when it gets in trouble; I declared bankruptcy.  My apologies to the original investors in Sky Chariot,  :P but your sacrifice was not in vain because the new Sky Chariot got a nice reputation bonus.  Maybe the middle starting option should give a loyalty bonus at your HQ and start with a smaller fleet so that new players don't feel so much pressure to rush their planes into service.  By the way, I'm doing fine now despite a few small missteps, so my new shareholders can rest easy.

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