Unwise Uma borrowed $1000 at some positive interest rate for present consumption, which did not result in increases in future income. This debt needs to be repaid sometime over the next 5 years.
What is the net effect of this debt on the average annual consumable income for Uma over the next 5 years?
- goes up by at least $100 on average
- no effect
- goes down by at least $200 per year on average
- goes down by at least $300 on average