The reward for capital is

Assessment: WAEC SSCE - Economics - 1999 (Objective) Subject: Economics

Question 1 Report

The reward for capital is
Answer Details
The reward for capital is interest. Interest is the compensation that is paid by a borrower to a lender for the use of their money. Capital refers to the funds or assets that are available for investment, and the return on that capital is in the form of interest. Interest rates are determined by a variety of factors, including the supply and demand for credit, inflation, and monetary policy. In other words, when someone invests their capital, they expect to earn interest on that investment as a reward for putting their money at risk. This interest serves as an incentive for people to invest their money, which in turn fuels economic growth and development.

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