ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Interest is the monetary charge for borrowing money-generally expressed as a percentage, such as an annual percentage rate (APR). Interest may be earned by lenders for the use of their funds or paid by borrowers for the use of those funds.

Detailed explanation-2: -interest, the price paid for the use of credit or money. It may be expressed either in money terms or as a rate of payment. A brief treatment of interest follows. For full treatment, see capital and interest.

Detailed explanation-3: -Interest-The price of using someone else’s money; the price of borrowing money. Interest rate-The price paid for using someone else’s money, expressed as a percentage of the amount borrowed.

Detailed explanation-4: -Interest is essentially a charge to the borrower for the use of an asset. Assets borrowed can include cash, consumer goods, vehicles, and property. Because of this, an interest rate can be thought of as the “cost of money”-higher interest rates make borrowing the same amount of money more expensive.

Detailed explanation-5: -What is an interest rate? To put it simply, interest is the price you pay to borrow money – whether that’s a student loan, a mortgage or a credit card. When you borrow money, you generally must pay back the original amount you borrowed, plus a certain percentage of the loan amount as interest.