If a financial institution pays an interest rate of 1% to savers and charges borrowers 3%, they earn a profit of _____
A) 1 percent.
B) 2 percent.
C) 3 percent.
D) 4 percent.
E) 5 percent.

Question

Quizplus · Accepted Answer

The financial institution earns a profit by the difference between the interest rate charged to borrowers (3%) and the interest rate paid to savers (1%), which is 2%.

If a Financial Institution Pays an Interest Rate of 1