Question

Why is there a difference between interest charged and interest earned? Question 7 options: Banks are non-profit institutions. Banks are profit-making institutions. Banks must pay more than they receive. There is no difference between interest charged and interest earned.

Answer 1

Banks are profit-making institutions.

Answer 2

hi there!!

Step-by-step explanation:

the answser is Banks are profit-making institutions.

Spread between interest charged and interest earned. The difference between IC and IE is profits for the bank. In banking, the interest rate spread is simply the difference between interest banks earn on their loans and interest banks pay on their deposits.

When you deposit money in a bank account or similar account, you basically lend that money to the bank and earn interest. Some banks offer higher interest rates than others. When you borrow money, you pay interest in exchange for usingsomebody else's money.