Discussion
Interest, from the lender's point of view, is
Answer: B
Correct answer: the return earned for parting with money for a time
Interest is the price of time. The lender gives up the use of the money and the chance to invest it elsewhere, and interest is the compensation for that. Default risk and administrative cost are added to the rate charged, but they are not what interest fundamentally is - a riskless loan still commands interest.
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