Final answer:
The percentage charged annually for a loan is known as the interest rate, which can be either simple interest, calculated on the principal alone, or compound interest, calculated on the principal plus any accumulated interest.
Step-by-step explanation:
The percentage that is charged per year for a loan is called the interest rate. There are two main types of interest: simple interest and compound interest. Simple interest is calculated only on the principal amount, whereas compound interest is calculated on the principal and also on the accrued interest from previous periods. For example, if you supply money into a savings account, you receive interest on your deposit. This is the interest rate payable to you by the bank. Conversely, when you take a loan, you pay the interest rate to the lender.