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प्रश्न
Answer the following question.
What is Interest? Explain its features.
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उत्तर
Meaning:
- Interest is a payment made for using the money from another person.
- The borrower takes money from the lender. Thus, for borrowers, interest is the cost of renting money and for the lender, interest is the income from his lending money.
- The company has to pay interest if it has borrowed money from creditors like Debentures holders, Depositors, Bondholders, etc.
Features:
- Interest is the price paid for the productive services rendered by capital.
- It is directly related to risk. The higher the risk, the higher is the interest.
- Rate of Interest is expressed as an annual percentage of Principal.
- The rate of interest is determined by various factors like money supply, fiscal policy, the volume of borrowings, rate of inflation, etc.
- Interest is a charge against the profit of the company. Even if the company makes no profit, interest should be paid.
- It is payable at a fixed and generally pre-determined rate.
APPEARS IN
संबंधित प्रश्न
______ is a return paid to creditors by the company.
Write a word or a term or a phrase which can substitute the following statement.
The return paid to the creditors by the company.
Find the odd one.
Select the suitable option for the following.
Interest ____________.
Select the suitable option for the following.
____________ Final Dividend.
Select the suitable option for the following.
Deposit Holders ____________.
Answer in one sentence.
What is Interest?
Correct the underlined word and rewrite the following sentence.
Interest is paid to shareholders.
Correct the underlined word and rewrite the following sentence:
Dividend is an obligation to be paid by a company every year.
Explain the following term/concept.
Interest
Distinguish between the following:
Dividend and Interest
Justify the following statement.
Interest is a liability/obligation of the company.
The reward given for the use of capital
What do you mean by interest?
