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Single Answer MCQ
Q-00045446

What does the term 'interest rate' refer to?

1

The fee for processing a loan

2

The cost of borrowing money

3

The fine for late payment

4

The profit made on a loan

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Sandeep Chaturvedi

Sandeep Chaturvedi

CBSE Social Science & Humanities Reviewer

Social science and humanities educator with 14+ years of experience reviewing CBSE SST, economics, commerce, arts, and vocational content.

M.A. HistoryM.A. Political ScienceB.Ed.

Answer and Solution

Answer

B. The cost of borrowing money

Solution:

The interest rate is the cost of borrowing money, which borrowers must repay in addition to the principal amount.

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