Respuesta :
Answer: A) extra money paid in interest
When you get financing, it's another way of saying you get a loan. When you pay back the loan, you pay back the original amount borrowed (principal) plus interest. The term "interest" is interchangeable with "finance charge". In a sense, they are charging you money to let you borrow or finance. With good credit, the interest rate is likely to be lower, and therefore the finance charge would be lower as well. There is a very high chance that all loans use interest or else the bank wouldn't make any money.
The finance charge a borrower pays is the extra money he or she pays on interest.
When a person approach a financial institution to finance a facility which is called a loan.
What is a Loan?
This is a facility which is granted to the borrower in order to settle some personal needs eg
- Mortgage
- Business
- School fees
over a fixed period of time. When the borrower (obligor) is repaying the loan, the extra charge placed on the original facility is called the interest which is added to the facility. The extra charge is usually placed on a percentage to the original amount borrowed. This implies that it is not a fixed amount for all loans but based on percentage.
The finance charge a borrower pays is the extra money he or she pays on interest.
Learn more on interest on loans here;
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