Question

Banks make the most money and take the most risk with an interest rate of 5 percent. 10 percent. 15 percent 18 percent.

Answer 1

Banks make the most money and take the most risk with an interest rate of :

18% (eighteen percent).

Answer 2

The correct answer is: "18 percent"

The interest rate is the amount charged for the use of a financial asset (for example, money during a certain period of time = a loan), it is paid by the borrower, earned by the lender and it is usually expressed as a percentage that is applied to the total value of the asset, called principal.

Banks will make the most money in those operations in which they act as lenders and a higher percentage is applied to the principal. In general, banks demand a higher return (a higher interst) to participate in operations that involve a higher risk, for example, lending money to a country with serious public deficit problems.