The interest rate
A) equals the expected rate of return minus depreciation.
B) expresses the relationship between saving and disposable income.
C) has no effect on the volume of investment in the economy.
D) is another name for profit.
E) is the annual amount a borrower must pay for the use of a dollar.

Question

Quizplus · Accepted Answer

The interest rate is the annual amount a borrower must pay for the use of a dollar. This is the cost of borrowing money and is usually expressed as a percentage of the amount borrowed. Therefore, option E is the correct choice. Options A, B, C, and D are incorrect as they do not correctly define or describe the concept of an interest rate.

The Interest Rate