Question by  NN (75)

How do you figure interest?

I don't understand how it works.


Answer by  bitchstewie (489)

Interest is the money paid or received on money borrowed or loaned as payment for the borrowing or the loan.


Answer by  John (9008)

It is the percentage paid on an account over time. It can be paid to a creditor (as in a loan) or to the holder of a savings or investment account. The rate is over time; thus, a 2% A.P.R. will pay two percent of the amount over a year.


Answer by  tamarawilhite (17883)

When you put money in a bank account, those funds and others are loaned by the bank to others. You are paid interest of 2-4% while the bank loans it out at 5-8%, as payment for letting them hold your money.

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