Provide an example of how you can use the power of compounding interest to pay for a future expense.
Interest is the cost associated with borrowing or lending money. It can be considered a fee on borrowed assets. [ When lending money, banks apply an interest rate to the loan so that the amount repaid is greater than what was originally lent, creating a profit. A loan will have an annual percentage rate (APR) to explain the interest cost of this loan in one year.
Generally, it is the interest
rate of a loan that determines the total cost to the consumer. A high interest rate loan will cost more to repay than a low interest rate loan, all things being equal. Therefore it behooves borrowers to search for a loan with a low rate in order to reduce the costs of repayment. Here is an example to compare. ]
There are no new answers.