Interest Money Math Definition

The rule of 72 is defined as a shortcut or rule of thumb used to estimate the number of years required to double.

Interest money math definition. Interest is really a fee charged for borrowing the money it is a percentage charged on the principal amount for a period of a year usually. Alex borrows 5000 from the bank at a 5 interest rate and has to pay 250 interest in the first year. Interest can also refer to the amount of ownership a stockholder has in a company. Interest represents a change of money.

Interest is the charge for the privilege of borrowing money typically expressed as annual percentage rate apr. Interest is the money paid for the use of someone else s money or assets. Si prt where p principal r rate of interest t time of period. Simple interest is a quick method of calculating the interest charge on a loan.

How much is paid for the use of money as a percent or an amount money is not free to borrow people can always find a use for money so it costs to borrow money. The formula for simple interest is. Money paid for the use of other money. Sam invests 1000 and receives 60 in interest after a year.

It is distinct from a fee which the borrower may pay the lender or some third party.