People borrow money because they expect
A) their purchases to give them the satisfaction in the future that compensates them for the interest payments charged on the loan.
B) the time value of money to apply only if they are saving money.
C) interest rates to rise.
D) that consumers don't need to calculate the impact of interest on their purchases.

Question

Quizplus · Accepted Answer

People borrow money with the expectation that the satisfaction or utility derived from their purchases will outweigh the cost of interest payments over time. This is based on the principle that the value or utility of the purchase is worth more to them now than the sum of the repayment and interest in the future. Choices B, C, and D do not accurately describe common reasons for borrowing money.

People Borrow Money Because They Expect