Question

Which of the following best describes interest as it relates to credit?

A. Additional money earned for having an account
B. The limit for which an individual may use credit
C. The charge for the privilege of borrowing money
D. The total amount a borrower must repay a lender for a loan

Answer 1

C. The charge for the privilege of borrowing money

Hope this helps you and you past your test good luck too you.

Answer 2

C

Explanation:

Let's say you wanted to buy a television. The television cost $200 but you only have $100, so you ask your friend for some money. Your friend says they will give you money but you have to pay them back and pay them interest. So when you go pay them, you pay them $100 dollars along with the amount of money your friend wants you to pay them for borrowing their money. In the end you could end up giving them 120 instead of 100.