ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Interest rate is the amount charged over and above the principal amount by the lender from the borrower.

Detailed explanation-2: -Interest-The price that people pay to borrow money. When people make loan payments, interest is a part of the payment. Interest Rate-The cost of borrowing money expressed as a percentage of the amount borrowed (principal).

Detailed explanation-3: -Interest is the cost of borrowing money or the reward for saving.

Detailed explanation-4: -Annual Percentage Rate (APR) is the interest charged for borrowing that represents the actual yearly cost of the loan expressed as a percentage.

Detailed explanation-5: -The total cost of the loan is the amount of money that you borrow plus the interest that you have to pay on that loan. Therefore, cost of borrowing refers to the principal amount of the loan + the interests + the fees that you have to pay for that loan and the total amount equals what is called cost of borrowing.