The Allied Handbook of Economics

INTEREST Interest is the price paid for borrowed funds, that is, for hiring and
purchasing of capital. Net interest also called as pure interest is the payment
made exclusively for the use of capital. Gross interest is the gross amount of
interest paid for the use of borrowed funds. It is a broader term than net interest
Gross interest = Net interest + payment for risk + management cost +
compensation for inconvenience Time preference theory of interest: This theory
developed by Prof. Fisher is ...