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Business Studies

Banking Service

Banks lend mo...

Question

Banks lend money by charging a certain amount of fee. The additional charge is known as ______________.

A

interest

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B

dividends

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C

proft

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D

loss

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Solution

The correct option is A
interest

Banks lend money by charging a certain amount of fee. The additional charge is known as interest.

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Similar questions

Q. Banks lend money by charging a certain amount of fee. The additional charge is known as.

Q. Assertion (A): Banks earn their profits by mobilising the depositor's money to the borrowers and keeping a portion of the interest charged.

Reason (R): Banks function for service motives; they do not function to make money, so they charge only interest and do not make any profits.

Q. A person borrows a certain amount of money at 5% simple interest and he lends that amount to another person at 10% compound interest, after three years his profit is Rs.905. Find out the amount he borrowed.

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