What are interests?

Interest is commonly known as a % of money that you need to pay for a loan you have taken or receive in case you would have to receive for the money that you have given someone.

Fairly we know that we all need money right? So the person who is giving the money as a loan he is postponing his use of the money by doing so... So as a good man you need to compensate him for his loss right so you need to pay a small rate of interest along with the loan itself. i.e. 5% interest loan on $5,000/=


The fee charged by a lender to a borrower for the use of borrowed money, usually expressed as an annual percentage of the principal; the rate is dependent upon the time value of money, the credit risk of the borrower, and the inflation rate. Here, interest per year divided by principal amount, expressed as a percentage. It is also called Interest rate.