Functions and Role of money - A

Question 1

What does interest rate mean?

Answer 1

Interest rate – the cost of borrowing money or the reward for saving money.

Question 2

What dose debt mean?

Answer 2

Debt – money owed

Question 3

What does credit rating mean?

Answer 3

Credit rating – a score given to individuals on how likely they are to repay debts based upon their previous actions

Question 4

What does bankrupt mean?

Answer 4

Bankrupt– when an individual or organisation legally states its inability to repay debts.

Question 5

What does solvent mean?

Answer 5

Solvent– the ability to meet day-to-day expenditure and repay debts.