Interest - Definition

An interest Rate is a percentage of the borrowed money, that the borrower has to pay as interest to the lender, over a period of time (usually a year). If the interest is not paid back to the lender at the end of the term, but instead added to the borrowed Amount, the interest is compounded.

This means the interest payable at the end of the next term includes interest on the original amount borrowed, as well as interest on the previously Accrued interest.

For example, if you took a loan out for $500, and let's say you have to pay it back with 15% interest, you would pay back $575.



Terms near "Interest"

Interest (Rate)
Interest Rate Swap
International Monetary Fund (IMF)
International Monetary Market (IMM)
International Organization for Standardization (ISO)
International Securities Dealers Association (ISDA)
Intervention
Intra-Day Position
Intrinsic Value
Investment
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