“The rate of interest represents the compensation to the lender for the administrative cost incurred, such...

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“The rate of interest represents the compensation to thelender for the administrative cost incurred, such as rent,salaries, air conditioner, and other costs. Also a compensation forthe risk of not recovering the cash flow that was lent, and for anadditional profit.”
Why do you think in the Puerto Rico Bank and Financial sector, theinterest rate that is paid to the clients in the savings accountsis so low? Few years ago the interest rates were much higher.

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A bank earns Interest by lending money to borrowers Where does this money come from It comes from the money deposited by customers in their savings accounts and term deposit accounts It also takes money from Central Bank of the See Answer

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“The rate of interest represents the compensation to thelender for the administrative cost incurred, such as rent,salaries, air conditioner, and other costs. Also a compensation forthe risk of not recovering the cash flow that was lent, and for anadditional profit.”Why do you think in the Puerto Rico Bank and Financial sector, theinterest rate that is paid to the clients in the savings accountsis so low? Few years ago the interest rates were much higher.