Dictionary
Financial Glossary
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> "Interest" Definition |
 Interest
The price paid for borrowing money. It is expressed as a percentage rate over a period of time and reflects the rate of exchange of present consumption for future consumption. Also, a share or title in property.
1. The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.
The charge you pay if you borrow money, and the income you receive if you lend it or invest it in an income-producing bank account or in a security like a bond or a gilt. For example if you borrow £1,000 at an interest rate of 10% per year, the interest payable is £100 per year. Loans are sometimes made at fixed rates of interest, and sometimes at variable rates.If you invest £1,000 at 10%, then you as lender expect to receive £100 interest. If instead of spending the interest, you reinvest it in the same security, then at the start of the second year you will have £1,100 invested and attracting 10%, so at the end of the second year you expect to receive £110 interest. This is the principle of compound interest, where you get rolling interest on your original capital and on the reinvested income.
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Glossary 
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Interest - The price paid for borrowing money. It is expressed as a percentage rate over a period of time and reflects the rate of exchange of present consumption for future consumption. Also, a share or title in property.
1. The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.
The charge you pay if you borrow money, and the income you receive if you lend it or invest it in an income-producing bank account or in a security like a bond or a gilt. For example if you borrow £1,000 at an interest rate of 10% per year, the interest payable is £100 per year. Loans are sometimes made at fixed rates of interest, and sometimes at variable rates.If you invest £1,000 at 10%, then you as lender expect to receive £100 interest. If instead of spending the interest, you reinvest it in the same security, then at the start of the second year you will have £1,100 invested and attracting 10%, so at the end of the second year you expect to receive £110 interest. This is the principle of compound interest, where you get rolling interest on your original capital and on the reinvested income.
Interest : the price paid for borrowing money. it is expressed as a percentage rate over a period of time and reflects the rate of exchange of present consumption for future consumption. also, a share or title in property.
1. the charge for the privilege of borrowing money, typically expressed as an annual percentage rate.
the charge you pay if you borrow money, and the income you receive if you lend it or invest it in an income-producing bank account or in a security like a bond or a gilt. for example if you borrow £1,000 at an interest rate of 10% per year, the interest payable is £100 per year. loans are sometimes made at fixed rates of interest, and sometimes at variable rates.if you invest £1,000 at 10%, then you as lender expect to receive £100 interest. if instead of spending the interest, you reinvest it in the same security, then at the start of the second year you will have £1,100 invested and attracting 10%, so at the end of the second year you expect to receive £110 interest. this is the principle of compound interest, where you get rolling interest on your original capital and on the reinvested income.
