Question

The amount charged by a bank to lend you money is called

Question 5 options:

	Money
	Down payment
	Interest
	Principal
	All of the above

Answer 1

Money- Money is just the medium of exchange, it may be coin or a banknote. Generally used to purchase goods and services.

Down Payment- It is the initial payment when someone purchased something on credit.

Suppose someone purchased a smartphone of $5000 and company offered 10% down payment.

Therefore the person should pay $500 primarily, the rest of the amount should be paid on a fixed interest rate. Down payments decides the monthly payment will be smaller or bigger.

Interest- It is the payment from a borrower for any previous borrowings to any financial institutions or banks, which lends money. It is charged at a particular rate. Rate of interest is decided according to the amount borrowed.

Principle- It is amount of money when someone is borrowing from any financial institutions or banks as a loan to invest somewhere.

So here 3^rd option is correct.