1

**Interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum. **

In finance, a bond is an instrument of indebtedness of the bond issuer to the holders.

A creditor is a party that has a claim on the services of a second party.

Simple Interest Formula by The Organic Chemistry Tutor

2

**It is distinct from a fee which the borrower may pay the lender or some third party.
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A fee is the price one pays as remuneration for rights or services.

Simple Interest Formula | MathHelp.com by MathHelp.com

3

**For example, a customer would usually pay interest to borrow from a bank, so they pay the bank an amount which is more than the amount they borrowed; or a customer may earn interest on their savings, and so they may withdraw more than they originally deposited. **

4

**In the case of savings, the customer is the lender, and the bank plays the role of the borrower.
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5

**Interest differs from profit, in that interest is received by a lender, whereas profit is received by the owner of an asset, investment or enterprise.
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To invest is to allocate money in the expectation of some benefit in the future.

6

**The rate of interest is equal to the interest amount paid or received over a particular period divided by the principal sum borrowed or lent.
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7

**Compound interest means that interest is earned on prior interest in addition to the principal. **

Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest.

8

**Due to compounding, the total amount of debt grows exponentially, and its mathematical study led to the discovery of the number e. In practice, interest is most often calculated on a daily, monthly, or yearly basis, and its impact is influenced greatly by its compounding rate.**

Borrow or borrowing can mean: to receive from somebody temporarily, expecting to return it.