interest
the charge for the privilege of borrowing money, usually expressed as annual percentage rate (APR)
Interest is the fee that borrowers pay to lenders for using their money over a set period of time. It is typically expressed as a percentage of the amount borrowed, and the interest rate can vary based on various factors such as the borrower’s creditworthiness, the term of the loan, and the lender’s risk tolerance.
Interest can be charged on a variety of financial products, including loans, credit cards, mortgages, and savings accounts. When a borrower takes out a loan, they must pay interest on the amount borrowed in addition to repaying the principal (the original amount borrowed). Similarly, when an individual deposits money into a savings account or other interest-bearing account, they can earn interest on the amount they deposited.
Interest is an important component of personal finance, as it can significantly impact the cost of borrowing or the potential earnings on investments. Individuals should carefully consider the interest rate and associated fees when seeking a loan or opening a savings account to ensure they are making informed financial decisions.
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