The useful idea
- The useful idea
In finance and economics, interest is payment from a debtor or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount
- How it works
It is distinct from a fee which the borrower may pay to the lender or some third party.
- Why it matters
It is also distinct from dividend which is paid by a company to its shareholders (owners) from its profit or reserve, but not at a particular rate decided beforehand, rather on a pro rata basis as a share
Why this matters
Use Interest to compare the trade-offs before committing money.
Try this
Use Interest to compare the trade-offs before committing money.
Test your recall
Which idea belongs to the explanation of Interest?
- The useful idea — correct
- How it works
- Why it matters
In finance and economics, interest is payment from a debtor or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount
General education only — not personal financial advice.