What is the difference between Gross interest and net interest? In common language interest is a payment made by a borrower to the lender for the use of money usually stated as per. cent per year.
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The supply and demand theory of interest explained. Capital is demanded by the investors because of its productivity. A firm or a producer demands capital as he wants to grow with production.
The liquidity preference theory of interest explained. Liquidity means shift ability without loss. It refers to easy convertibility. Money is the most liquid assets. Money commands universal acceptability. Everybody likes to hold assets in form of cash money.
Why do we really pay interest for the use of capital? Interest is the price paid for the use of capital. Capital ay be either in the from machines and tools or in monetary is.
What is the difference between gross interest and net interest? Interest is a price for the use of borrowed funds. The funds are required to buy capital assets for further production. Generally borrowing is made in monetary terms.
To counter the challenges of communalism and casteism, the constitution of India prescribes protection and safeguard to the minorities, weaker sections and backward classes.
There are mainly three types of mental activity-knowing, feeling and willing. We must attend to a particular thing at first in order to know, feel or act. Attention is common to all these mental activities. It is a pre-condition to them and is always present in conscious life. It is a characteristic of our consciousness.
It is a fact that there is close relation between attention and interest. Each of our interests may be regarded as a powerful stimulus to draw our attention to a particular thing, person or an activity.
Once the attention of the prospect is drawn towards the product, his interest in that product should be developed for maintaining that attention. Creating interest is highly essential because attention is usually temporary.
The topic of interest has been a very controversial one. Harold Somers has rightly said, “Few topics in Economics infact have received as varied treatment as has the theory of interest.” Interest is the reward, remuneration and an incentive provided to the moneylender for depriving him of his money for certain period.