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 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-3: -What are the Different Types of Interest? The three types of interest include simple (regular) interest, accrued interest, and compounding interest. When money is borrowed, usually through the means of a loan, the borrower is required to pay the interest agreed upon by the two parties.

Detailed explanation-4: -This is due to interest and fees, which is what a lender charges you for the use of its money. It is also referred to as a finance charge. A finance charge is the dollar amount that the loan will cost you. Lenders generally charge what is known as simple interest.

Detailed explanation-5: -interest (n.) The earlier Middle English word was interesse (late 14c.), from Anglo-French interesse “what one has a legal concern in, ” from Medieval Latin interesse “compensation for loss, ” noun use of Latin interresse (compare German Interesse, from the same Medieval Latin source).