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Question 6 (Multiple Choice Worth 3 points)

What is interest?

A. A type of credit that does not require a deposit
B. A type of loan for purchasing a home
C. The rate paid for the use of credit
D. The rate paid for a good or service



Answer :

GinnyAnswer

Final answer:

Interest is the income earned from lending savings and is quoted as a percentage of the principal. It represents the cost of borrowing money or the return on savings.


Explanation:

Interest is the income earned from lending savings to others, quoted as a percentage of the principal earned per year. It represents the cost of borrowing money or the return on savings. For example, lending [tex]$1,000 and receiving $[/tex]1,050 back results in $50 interest earned, with a 5% interest rate.


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