Differences in interest rates for different type of loans are due to:
A) the length of time the borrower has to repay the loan.
B) the amount of the loan.
C) government policy.
D) exchange rate

Question

Quizplus · Accepted Answer

The length of time the borrower has to repay the loan is a key factor in determining the interest rate for the loan. Loans with longer repayment periods typically have higher interest rates compared to short-term loans. This is because longer-term loans carry more risk for the lender, who may require a higher return in order to make the loan worth their while.

Differences in Interest Rates for Different Type of Loans Are