The interest rate that investors demand for loaning their money is referred to as the:

Question

Quizplus · Accepted Answer

The effective rate of interest takes into account not only the stated or contract rate of interest, but also any additional fees or charges associated with the loan. This is the true cost of borrowing for the borrower and the rate that investors demand for loaning their money. Choice A and D are incorrect because they only refer to the stated or contract rate of interest, which does not give a full picture of the cost of borrowing. Choice B is incomplete because it does not specify whether it is referring to the stated or contract rate or the effective rate.

The Interest Rate That Investors Demand for Loaning Their Money