When you borrow money, the interest rate on the borrowed money is the price you pay to be able to convert your future loan payments into money today.

Question

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The interest rate represents the cost of borrowing money, which is the price paid to access cash early before having the full amount on hand to pay for it. This cost is included in the total loan payments, which enables the borrower to have access to an immediate pool of funds.

When You Borrow Money, the Interest Rate on the Borrowed