What is the word for a fee based on a percentage of money borrowed?
A. collateral
B. credit
C. debt
D. interest
The word for a fee based on a percentage of money borrowed is D. interest.
The word for a fee based on a percentage of money borrowed is called interest. To arrive at this answer, you can analyze the options provided:
A. Collateral: Collateral refers to an asset that a borrower offers as security against a loan. It does not relate to a fee.
B. Credit: Credit refers to the ability of a person to borrow money or access goods or services with the agreement to pay for them later. While interest is related to credit, it does not specifically refer to the fee based on a percentage of money borrowed.
C. Debt: Debt refers to money that is owed or an obligation to pay. While interest may be associated with debt, it does not specifically refer to the fee based on a percentage of money borrowed.
D. Interest: Interest is the correct answer because it represents the fee charged on borrowed money, usually expressed as an annual percentage rate (APR).
Therefore, the correct answer is D. interest.