QuestionInterest rate is a percentage periodically applied to a sum of money to determine the amount of interest to be added to that sum
Select one:
True
False
Studdy Solution
STEP 1
1. We are evaluating a statement about the definition of an interest rate.
2. An interest rate is typically expressed as a percentage.
3. The interest rate is applied to a principal amount to calculate interest.
STEP 2
1. Understand the definition of an interest rate.
2. Evaluate the statement based on the definition.
STEP 3
Understand the definition of an interest rate:
An interest rate is a percentage that is periodically applied to a principal sum of money to calculate the interest that will be added to that sum. This is a standard definition used in finance.
STEP 4
Evaluate the statement:
The statement given is: "Interest rate is a percentage periodically applied to a sum of money to determine the amount of interest to be added to that sum."
Compare this statement with the definition understood in STEP_1. The statement accurately describes an interest rate.
The correct selection for the statement is:
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