ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A finance charge is any fee charged for borrowing money. The finance charge is the total amount of interest charged over the term of the loan expressed in dollar terms. Finance charges may be treated as a form of interest. A finance charge is any fee charged for borrowing money.

Detailed explanation-2: -The most common type of finance charge is the amount of interest charged on the amount of money borrowed. However, finance charges also include any other fees related to borrowing, such as late fees, account maintenance fees, or the annual fee charged for holding a credit card.

Detailed explanation-3: -In personal finance, a finance charge may be considered simply the dollar amount paid to borrow money, while interest is a percentage amount paid such as annual percentage rate (APR).

Detailed explanation-4: -A finance charge definition is the interest you’ll pay on a debt, and it’s generally used in the context of credit card debt. A finance charge is calculated using your annual percentage rate, or APR, the amount of money you owe, and the time period.

Detailed explanation-5: -Credit cards charge interest on any balances that you don’t pay by the due date each month. When you carry a balance from month to month, interest is accrued on a daily basis, based on what’s called the Daily Periodic Rate (DPR).