Question

Interest is a payment for ______.

Options

• Use of durable goods

• Use of capital

• Use of public goods

• Use of only services

Answer 1

Interest is a payment for use of capital.

Explanation:

Interest is the payment made for the use of capital, typically in the form of money. When individuals or businesses borrow capital (such as money), they pay interest as the cost of using it. This payment compensates the lender for the opportunity cost of forgoing other potential uses of the capital.