👉 Leverage is a term used in finance and economics to describe an investment that involves borrowing money from another person or organization. It can be defined as the act of using other people's funds without directly lending them back, but rather earning interest on what they lend you. For example, if someone lends you $1000 at 5% interest per year, you would earn $50 in interest each year. This is leveraged because you are borrowing money from others to make this