A fixed charge for borrowing money; usually a percentage of the amount borrowed is the INTEREST.
Step-by-step explanation:
- Interest, in finance and economics, is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum at a particular rate.
- It is distinct from a fee which the borrower may pay the lender or some third party.
- Interest is the charge for the privilege of borrowing money, typically expressed as annual percentage rate (APR).
- Interest is calculated as a percentage of a loan (or deposit) balance, paid to the lender periodically for the privilege of using their money.
- The amount is usually quoted as an annual rate, but interest can be calculated for periods that are longer or shorter than one year
- Interest can also refer to the amount of ownership a stockholder has in a company, usually expressed as a percentage