The interest rate that determines the amount of cash interest the borrower pays and the investor receives each year is called:
A)amortization rate.
B)market interest rate.
C)stated interest rate.
D)discounting rate.

Question

Quizplus · Accepted Answer

The stated interest rate, also known as the nominal or coupon rate, is the rate specified in the bond or loan agreement that determines the cash interest paid by the borrower and received by the investor annually.

The Interest Rate That Determines the Amount of Cash Interest