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 rate-The price paid for using someone else’s money, expressed as a percentage of the amount borrowed.

Detailed explanation-3: -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-4: -Interest. Interest is the amount of money a financial institution charges for letting you use its money. The rate of interest can be either fixed or variable. • Fixed rate means the interest rate stays the same throughout the term of the loan.

Detailed explanation-5: -Can I lend money to a friend and charge interest? Yes, you can, but the tax ramifications can be tricky and complicated. You would have made interest on the money if you had kept it in an interest-bearing account, and that’s one good reason to charge interest.