Interest Definition

Interest is the money paid to a lender by the borrower in addition to the money that was borrowed (principal).

Interest Expanded Definition
As a small business owner, you might be charging interest to a customer or paying interest to a lender (e.g., bank). Interest is usually computed as either nominal interest (flat rate), real interest (takes inflation into account), or effective interest (compounded).

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Last Updated By

Jenna Hutkowski | Apr 12, 2023