## ::Interest

### ::concepts

Interest::money    Rates::''k''    Interest::''b''    ''r''::loans    Payment::balance    Payments::period

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Interest is money paid by a borrower to a lender for a credit or a similar liability. It is the charge for the privilege of borrowing money.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> Important examples are bond yields, interest paid for bank loans, and returns on savings. Interest differs from profit in that it is paid to a lender, whereas profit is paid to an owner. In economics, the various forms of credit are also referred to as loanable funds.

When money is borrowed, interest is typically calculated as a percentage of the principal, the amount owed to the lender. The percentage of the principal that is paid over a certain period of time (typically a year) is called the interest rate. Interest rates are market prices which are determined by supply and demand. They are generally positive because loanable funds are scarce.

Interest is often compounded, which means that interest is earned on prior interest in addition to the principal. The total amount of debt grows exponentially, and its mathematical study led to the discovery of the number e.<ref>{{#invoke:citation/CS1|citation |CitationClass=web }}</ref> In practice, interest is most often calculated on a daily, monthly, or yearly basis, and its impact is influenced greatly by its compounding rate.

Interest sections
Intro  History of interest   Economic Theories of the Interest Rate   Types of interest  Market interest rates  Interest in mathematics  Formulas   See also   Notes  References  External links

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