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Interest is a fee (or payment) made for the borrowing (or lending) of money. The two most common types of interest are Simple Interest, for which interest is paid only on the initial Principal, and Compound Interest, for which interest earned can be re-invested to generate further interest.

See also Compound Interest, Conversion Period, Rule of 72, Simple Interest


Kellison, S. G. Theory of Interest, 2nd ed. Burr Ridge, IL: Richard D. Irwin, 1991.

© 1996-9 Eric W. Weisstein