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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Size affecting interest rates
Hello Sir, I hope you’re having a good day….please help me with this one factor from your notes, wouldn’t the interest rates be higher for borrower too?
”Size:
If a large sum of money is lent or borrowed, there are administrative savings; hence a
higher rate of interest can be paid to a lender and a lower rate of interest can be
charged to a borrower than would normally be the case. ”
For this factor on its own, since it costs the lender less in administrative costs they can charge lower interest that they would if the amount was smaller.
Oh ok, thank you for the confirmation!!
You are welcome 🙂