Question

As compared to the rate of interest on deposits in the bank, the rate of interest on loans is

• A. more
• B. equal
• C. less
• D. none of these

Hint:

The difference between loan and deposit interest rates is the bank's profit margin, with loan interest typically being higher.

Answer 1

The Correct Option is A

Step 1: Understanding the difference in interest rates.
Banks typically charge a higher rate of interest on loans compared to the interest rate they pay on deposits. This difference is the bank's profit margin. The rate of interest on loans is higher to compensate for the risk involved in lending money.

Step 2: Analyzing the options.
(A) More: Correct. The interest rate on loans is generally higher than the rate on deposits.
(B) Equal: This is incorrect, as the interest rates on loans and deposits are not typically equal.
(C) Less: This is incorrect, as the rate on loans is typically higher than that on deposits.
(D) None of these: This is incorrect, as the correct answer is (A) More.

Step 3: Conclusion.
The correct answer is (A) More, as the interest rate on loans is usually higher than that on deposits.