The factor that determine the amount paid for borrowing money is the amount of the loan and the interest which have to be paid.
What do you mean by borrowing?
Borrowing generally refers to the amount of money that a lender is willing to loan a person or a company. Borrowing is an act of receiving a certain amount of money with the intention that the receiver will have to return the amount of money with or without interest in a fixed span of time.
What do you mean by interest?
Interest is defined as the payment made by a borrower to a money lender for the use of production capacity of capital. Interest is the charge for the privilege of borrowing money. This has to be paid with the total amount borrowed, at the specific period of time.
What is a loan?
A loan is the lending of money by one or more individuals, organizations, or other entities to other individuals or borrowers. Thus, the borrower receives money from a lender, and the borrower will pay back the total amount borrowed, with added interest on a specific period of time.
What factors determine the amount paid for borrowing?
The factors that determine the amount paid for borrowing money are the amount of the loan, the time duration of the loan, and the annual percentage rate of the loan.
The larger the amount borrowed and the longer that it takes for a borrower to pay the money back. Thus, this determines how much interest will be paid on the loan. It is possible to reduce the amount you end up paying by shopping for the lowest annual percentage rate and paying off the loan as quickly as possible.
Hence, the answer is given and explained above.
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