Question

Show your understanding of interest by completing the following sentence: Interest is the amount of money (earned, owed) by the owner of an asset and (paid, earned) by the borrower of the asset for its use.

Answer 1

Interest is the amount of money earned by the owner of an asset and paid by the borrower of the asset for it's use.

Step-by-step explanation:

For example I am the owner of an asset which is cash and I lend out the cash to a borrower for a 7% interest. Now I as the owner of the asset will earn this 7% interest because I let someone else use my asset and they owe me this money, whereas on the other hand the borrower will pay me an interest for using my asset.