Interest is defined as what?

Interest is defined as what?

• A. Money earned on money you save with bank
• B. Profit from selling goods
• C. Loss from bad debt
• D. The budgeted expenses

Answer: (A)

Interest is the money earned on money you save or lend to someone. It’s the compensation you receive for letting someone use your funds, typically shown as a percentage of the amount you deposited (the principal) over a period of time. For example, saving money in a bank earns interest, and with compound interest that earned amount can grow as it itself earns interest. The other ideas describe earnings from selling goods, losses from unpaid debts, or planned costs in a budget, none of which define interest.

Interest is the money earned on money you save or lend to someone. It’s the compensation you receive for letting someone use your funds, typically shown as a percentage of the amount you deposited (the principal) over a period of time. For example, saving money in a bank earns interest, and with compound interest that earned amount can grow as it itself earns interest. The other ideas describe earnings from selling goods, losses from unpaid debts, or planned costs in a budget, none of which define interest.