122k views
2 votes
What is the purpose of interest?

User Rigi
by
3.2k points

1 Answer

4 votes
Interest is a key mechanism to ensure that resources are properly allocated within an economy. There are lots of uses to which money can be put: consuming goods, building highways, constructing a new factory, investing to develop a new drug, etc.
User Lzzluca
by
3.9k points