DEFINITION of 'Interest'

1. The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.

2. The amount of ownership a stockholder has in a company, usually expressed as a percentage.

Interest is commonly calculated using one of two methods: simple interest calculation, or compound interest calculation.


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1. Lenders make money from interest, borrowers pay it.

2. Someone who holds more than 5-10% of the stock in a company is said to hold significant interest.

  1. Gross Interest

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  4. Funding Agreement

    A low-risk, fixed-income investment. A funding agreement offers ...
  5. Compounding

    The ability of an asset to generate earnings, which are then ...
  6. Accrued Interest

    1. A term used to describe an accrual accounting method when ...
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