Question

Distinguish between gross interest and net interest

Answer 1

interest: -
Interest is a price for the use of borrowed funds. The funds are required to buy capital assets for further production. Generally borrowing is made in monetary terms. 

'Gross Interest':-

Gross interest is the annual rate of interest to be paid on an investment, security or deposit account before taxes or other charges are deducted. Gross interest is the interest bondholders receive from their investment, which will be subject to further taxes. This is opposed to net interest.

net interest:-

Net interest income is the difference between the revenue that is generated from a bank's assets and the expenses associated with paying out its liabilities. A typical bank's assets consist of all forms of personal and commercial loans, mortgages and securities. The liabilities are the customer deposits. The excess revenue that is generated from the interest earned on assets over the interest paid out on deposits is the net interest income.

Answer 2

Gross interest is the annual rate of interest to be paid on an investment, security or deposit account before taxes or other charges are deducted. Gross interest is theinterest bondholders receive from their investment, which will be subject to further taxes. This is opposed to net interest.