interest
IN-trist
/ˈɪntrəst/
Money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.
Can be earned (on savings) or paid (on loans). It's the 'cost' of money.
The story behind the word. The financial sense of 'interest' comes from the Latin phrase 'inter-esse', meaning 'to be between' or 'to make a difference'. In medieval Latin, 'interesse' referred to compensation for loss or damage, particularly for the loss of use of money. Over time, it evolved to mean the charge for borrowing money or the profit from lending it.
Word relationships
- yield: Yield often refers to the income returned on an investment, often expressed as a percentage.
- return: Return is the profit from an investment; interest is a specific component of that return.
Word family
- interested (adjective): having a financial stake in something.
- uninterested (adjective): not having a financial stake (distinct from 'disinterested').
Collocations
- interest rate
- earn interest
- pay interest
- compound interest
- simple interest
- high interest
- low interest
Example sentences
- "The interest rate on her credit card was very high, making her monthly payments substantial." Calculating loan costs.
- "Savings accounts typically offer a low interest rate, but it's still a way to grow your money." Earning on savings.
Memory hook
INTEREST is what's 'INTER' (between) you and the bank for using their money. INTER money
When not to use
Do not confuse with 'interest' meaning curiosity or attention. The financial context is key.
Fun facts
- The concept of 'usury' (lending money at excessively high interest rates) has been a moral and legal debate for centuries.
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