Why is there a difference between interest charged and interest earned? A)Banks are non-profit institutions.B)Banks are profit-m

Question

3 years ago

14

Why is there a difference between interest charged and interest earned? A)Banks are non-profit institutions.B)Banks are profit-m

aking institutions.C)Banks must pay more than they receive.D)There is no difference between interest charged and interest earned.

Business

1 answer:

skelet666 [1.2K] · Answer 1 · 2022-09-18T19:44:19+03:00

The correct answer is choice b.

Banks are profit-making institutions. Their purpose is to make a profit for their owners or stockholders. They need to charge more interest on the money that they loan out than what they pay on savings accounts so that there is a profit for them.