Advertisements
Advertisements
प्रश्न
Answer the following question.
What is Interest? Explain its features.
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
State whether the following statement is true or false.
Interest is a liability for company.
State whether the following statement is true or false.
Interest is paid to shareholders of 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
Explain the features of Interest.
Justify the following statement.
Interest is a liability/obligation of the company.
What do you mean by interest?
