## Interest

Interest is the money paid by a borrower to the lender for the use of money borrowed.

In other words the additional money paid for using other’s money is called interest.

## Some Key Things about Interest

### Principal or Sum

Principal or sum is the money that borrowed or lent out for a certain period.

### Time

It is the duration of period for which the money is borrowed.

### Amount

The sum of Principal and Interest is called Amount.

Amount = Principal + Interest |

### Rate of Interest

It is the Interest rate of the principal for a certain period.

### Example

For ex; Interest of 9% per Annum.

It means, the interest on principal of Rs. 100 for one year is Rs. 9.

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