Which best explains why banks consider interest on loans to be important?
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interest helps them cover business cost. hope this helps!
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Interest rate is the percent of the principle which is charged on the loan.
The interest rate is applied on both, depositors and borrowers.
The interest rate is charged on depositors in order to attract them to deposit their money, which in turn is used by bank to lend money to borrowers.
Interest charged on borrowers is more than that from the depositors, as the difference is the source of profit for banks.
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