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Definition of Interest:


"Interest is the price paid by the borrower to the lender for the use of borrowed funds during a certain period". Continue reading.


Analysis of Gross Interest:


"The interest earned on a deposit or security before the deduction of tax". Continue reading.


Difference in Interest Rates and Annual Percentage Rate (APR):


If pure interest is calculated over the same period of time in the same money market, it will tend to be the same. It can, however, differ in different markets on account of the following reasons. Continue reading.


Difference in Gross Interest Rates:


We have discussed in above, the three reasons which cause variations in the rate of pure interest. These causes are also applicable for explaining the difference in gross interest rates in addition to these the following two factors also influence the gross interest. Continue reading.


Theories of Interest/Why is Interest Paid?


There are various theories which have been put forward from time to time as to why the interest is paid. The most important theories are: Continue reading.




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Indifference Curve Analysis of Consumer's Equilibrium
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Introduction to Development Economics
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