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interest
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interest

In finance, a sum of money paid by a borrower to a lender in return for the loan, usually expressed as a percentage per annum. Simple interest is interest calculated as a straight percentage of the amount loaned or invested. In compound interest, the interest earned over a period of time (for example, per annum) is added to the investment, so that at the end of the next period interest is paid on that total.

A sum of $100 invested at 10% per annum simple interest for five years earns $10 a year, giving a total of $50 interest (and at the end of the period the investor receives a total of $150). The same sum of $100 invested for five years at 10% compound interest earns a total of $61.05 interest (with $161.05 returned at the end of the period). The difference arises from adding the previous period's interest to the capital before calculating the next payment.



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? Mentioned in ? References in periodicals archive
 
INTEREST RATES: While the Fed has left the door open for a tighter monetary policy, economists and financial traders widely expect short-term interest rates to remain at 5.
General outlook by Pro Farmer
Recent movement in long-term interest rates should provide all the incentive these borrowers need to reassess current funding strategies," funding expert Jeffrey A.
Timing issues becoming critical for healthcare borrowers by Real Estate Weekly
Rising interest rates could have a positive effect on office, industrial and mall REITs because most tenant leases require rents to rise when inflation goes up.
REITs get mixed investment review amid rise in rates by Berry, Kate / Los Angeles Business Journal
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