Servicing the debt is ___?

A) Paying interest on debt

B) Monitoring the rise and fall of the debt

C) submitting reports on the debt to the office of management and budget

D) Seeking lenders to borrow from

Answer: A) Paying interest on debt

Servicing the debt is paying interest on debt.

Explanation:

Debt servicing refers to payment of dues or cash in order to cover repayment of interest and principal on a debt.

Interest refers to the percentage of a debt balance which the lender gets for giving out his money. It is also the amount the lender earns and charges for the use of money he or she lent out.

A) Paying interest on debt

Explanation:

Debt service is one of the main procedures when a citizen needs to make a loan. This procedure refers to the payment of interest rates that will be necessary to settle a debt, generated by the loan. This ensures that the creditor of the money will receive all that was spent by him and that he will profit above that. This also ensures, that the debtor does not fail with his commitment.