Home Page                      Contact Us                      About Us                      Privacy Policy                       Terms of Use                      Advertise 

Home Interest Definition of Interest


Definition of Interest:


"Interest is the price paid by the borrower to the lender for the use of borrowed funds during a certain period".


In the words of Eastham:


"Interest is the payment for parting with the advantage of liquid control of money balances".


According to Batch:


"Interest is the price paid for the use of money or credit".


It is normally expressed as a percentage on the funds loaned or borrowed.


In the words of J. M. Keynes:


"Interest is the premium which has to be offered to induce people to hold their wealth in some form other than hoarded money".




For instance, if a man gives a loan of $1000 to a needy person for a year and charges 9% per annum as the price for the use of loaned funds, we say that the rate of interest in 9% per annum.


The payment which is generally made for the use of money loan able funds is in fact a gross interest. Pure interest is only a part of the gross interest.

Relevant Articles:

Definition of Interest
Analysis of Gross Interest
Difference in Interest Rates and Annual Percentage Rate (APR)
Difference in Gross Interest Rates
Theories of Interest/Why is Interest Paid

Principles and Theories of Micro Economics
Definition and Explanation of Economics
Theory of Consumer Behavior
Indifference Curve Analysis of Consumer's Equilibrium
Theory of Demand
Theory of Supply
Elasticity of Demand
Elasticity of Supply
Equilibrium of Demand and Supply
Economic Resources
Scale of Production
Laws of Returns
Production Function
Cost Analysis
Various Revenue Concepts
Price and output Determination Under Perfect Competition
Price and Output Determination Under Monopoly
Price and Output Determination Under Monopolistic/Imperfect Competition
Theory of Factor Pricing OR Theory of Distribution
Principles and Theories of Macro Economics
National Income and Its Measurement
Principles of Public Finance
Public Revenue and Taxation
National Debt and Income Determination
Fiscal Policy
Determinants of the Level of National Income and Employment
Determination of National Income
Theories of Employment
Theory of International Trade
Balance of Payments
Commercial Policy
Development and Planning Economics
Introduction to Development Economics
Features of Developing Countries
Economic Development and Economic Growth
Theories of Under Development
Theories of Economic Growth
Agriculture and Economic Development
Monetary Economics and Public Finance

History of Money

                   Home Page                Contact Us                About Us                Privacy Policy                Terms of Use                Advertise               

All the material on this site is the property of economicsconcepts.com. No part of this website may be reproduced without permission of economics concepts.
All rights reserved Copyright
2010 - 2015