what is a example of interest?
When a person borrows money, like on a credit card or for buying a car, the bank or finance company charges interest.
For instance, if you borrow $1,000 for a year and pay 5% interest a year, you'll pay
1,000 * 0.05 = $50 in interest for the year.
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Don't worry i just basically need example. Your Awsome!
An example of interest is the additional amount of money that is paid or earned when borrowing or lending money, or when investing in financial instruments such as bank accounts, bonds, or stocks.
To calculate interest, you need to know:
1. Principal: The initial amount of money involved.
2. Interest rate: The percentage of the principal that will be paid or earned as interest over a specific period of time.
3. Time: The duration for which the interest will be applied, usually expressed in years.
The formula to calculate simple interest is:
Interest = Principal x Interest Rate x Time
For example, if you deposit $1,000 in a savings account with an annual interest rate of 5% for 2 years, the interest can be calculated as:
Interest = $1,000 x 0.05 x 2 = $100
Therefore, in this example, the interest earned would be $100.