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LSDefine
Simple English definitions for legal terms
rate of interest
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A quick definition of rate of interest:
Rate of interest: The rate at which you earn money for lending or borrowing money. It is the percentage of the amount of money borrowed or lent that is charged or earned over a period of time. For example, if you borrow $100 at a 5% interest rate, you will have to pay back $105 after a certain period of time.
A more thorough explanation:
Definition: The rate at which interest is charged or paid on a loan or investment.
Example: If you borrow $1000 from a bank at an interest rate of 5%, you will have to pay back $1050 at the end of the loan term.
Explanation: The example shows how the rate of interest affects the amount of money that needs to be paid back on a loan. In this case, the interest rate of 5% means that the borrower has to pay an additional $50 on top of the original loan amount of $1000.