5 Questions
What is the definition of interest in finance and economics?
Payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum at a particular rate
How does interest differ from dividend?
Interest is paid by a borrower to a lender at a particular rate, while dividend is paid by a company to its shareholders from its profit or reserve
In the context of savings, who is the lender?
The customer
How is the rate of interest calculated?
Interest amount paid or received over a particular period divided by the principal sum borrowed or lent, usually expressed as a percentage
How does interest differ from profit?
Interest is received by a lender, whereas profit is received by the owner of an asset, investment, or enterprise
Test your knowledge of finance and economics with this quiz on interest payments, including the concepts of principal sum, interest rates, and distinctions from fees and dividends.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
