Question

Which of these best fits the definition of interest, as it applies to finance?

a. interest is the money earned by investing.
b. interest is the cost of borrowing money.
c. interest is the cost of investing poorly.
d. interest is the portion of a loan which must be repaid every year.

Answer 1

I think its B , correct me if im wrong i got an 88 on the test so i can't check. Hope i somewhat helped

Answer 2

The answer is "b. interest is the cost of borrowing money".

Interest refers to a fee that is charged by a lender to a borrower for the privilege to utilize the acquired assets. The assets can be utilized to buy a house, a vehicle, or merchandise that were charged on a Visa, for instance. The intrigue charge normally is communicated as a yearly rate.

Interest is charged on the foremost parity, which is most astounding toward the beginning of reimbursement. As the borrower makes installments on the credit, the vital equalization will diminish, causing the new intrigue that collects between installments to diminish, so a greater amount of every installment will be connected to the principal balance.