Definitions (3)

1. The fee charged by a lender to a borrower for the use of borrowed money, usually expressed as an annual percentage of the principal; the rate is dependent upon the time value of money, the credit risk of the borrower, and the inflation rate. Here, interest per year divided by principal amount, expressed as a percentage. also called interest rate.
2. The return earned on an investment.

Use interest in a sentence

The interest rate was low enough that inflation was more of a factor in our purchasing power rather than the interest rate.

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I finally paid off the $5000 loan from the bank but because of interest I ended up paying them over $1000 more than the amount I borrowed.

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