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Generally speaking, interest is a payment made by a borrower to the lender for the money borrowed.
Interest is the reward paid by the borrower to the lender for the use of capital.
“Interest is the price paid for the use of capital in any market”
Gross interest is the total interest amount received by creditors from debtors.
Gross Interest = (Net Interest) + (reward for inconvenience) + (insurance against risk of non-repayment) + (payment for service of debt management)
Net Interest is only a part of the gross interest. It is the payment for use of capital only.
A good example for net interest is the interest payable for Government Securities.
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