Mathematics for FinanceMTP Dec 23 Series IQuestion 3944 of 507
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The amount charged for a defined length of time for uses of principal, generally on year basis is known as

Options

ABalance
BRate of Interest
CPrincipal
DInterest
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Correct Answer

Option bRate of Interest

All Options:

  • ABalance
  • BRate of Interest
  • CPrincipal
  • DInterest

Detailed Solution & Explanation

Let's define the terms involved in financial mathematics: 1. **Principal**: The initial amount of money borrowed or invested. 2. **Interest**: The charge or cost for borrowing money, or the earnings from investing money. 3. **Rate of Interest**: The percentage of the principal charged or paid as interest for a defined length of time, generally on a yearly basis (per annum). 4. **Balance**: The total amount of money in an account at a given time. According to the definition, the amount charged for a defined length of time for the use of principal, generally on a yearly basis, is called the **Rate of Interest**. Hence, **Option B** is the correct answer.

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