Definitions (2)
Related Terms
1. Finance: A fee paid for the use of another party's money. To the borrower it is the cost of renting money, to the lender the income from lending it.

Interest on all debt is normally deductible before taxes are assessed on a company's income. Corporate legislation requires disclosure of interest payable on loans, and companies often show a single interest figure in the income statement while providing details in a note that may also include netting out of interest received or some other adjustments. In cost accounting, interest is normally excluded from cost computations on the grounds that (being a payment for capital) it is equivalent to dividend, and hence is a finance item and not a cost item.

The rate of interest is usually expressed as an annual percentage of the principal, and is influenced by the money supply, fiscal policy, amount being borrowed, creditworthiness of the borrower, and rate of inflation. the two types of interest are simple interest and compound interest.

2. Law: An advantage, claim, duty, liability, right, and/or title associated with a tangible or intangible item. Legal claim or right in or over an asset or property is called a security interest.

Depending on the situation, holding an interest may also be a qualification (such as the requirement of insurable interest for an insurance policy) or disqualification (such as a direct interest in the subject matter of a court case by anyone acting in a judicial capacity).

Use 'interest' in a Sentence

The interest on my credit card is higher than the interest I get from my savings account, which makes me wonder why I have a savings account to begin with.
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I was concerned about the amount of interest I would be paying on this loan so I payed it off immediately to be safe.
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The interest rate was so high on the loan that the couple decided to go to other banks for a comparison before making a final decision.
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