Definition: The price paid for obtaining, or price received for providing, money or goods in a credit transaction, calculated as a fraction of the amount or value of what was borrowed.
Alright class, settle down, let’s take a look! Today we’re tackling ‘interest,’ it's a word that can seem quite complex, But don't you worry, we’ll break it down, with no need to be perplexed. The dictionary gave us a definition clear, A price for borrowing – let’s make it crystal clear! Think of it like this: You want to buy a bike so grand, You ask the bank for money, lending hand in hand. They say, “We'll give you funds, but with a little fee,” That 'interest' is the cost, for all you’re going to see. It’s a fraction of the amount, a percentage you find, Added on top of your loan, expanding your mind! So when someone borrows money – a credit transaction bright, They pay ‘interest,’ it's part of the deal, and rightfully right. And if you lend out funds, a provider true, You earn ‘interest’ as your payment, for services anew! It’s calculated as a fraction, remember that is key, Of the total amount borrowed – for you to clearly see! Got it? Any questions bubbling up today? Let's discuss!