the cost of borrowing money. Glossary of Business Terms
What is paid to a lender for the use of his money and includes compensation to the lender for three factors: 1) Time value of money (lender's rate)-the value of today's dollar is more than tomorrow's dollar. Tomorrow's dollars are discounted to reflect the time a lender must wait to " enjoy" the money, not to mention the uncertainties tomorrow brings. 2) Credit risk-the risk of repayment varies with the creditworthiness of the borrower. 3) Inflation-as the purchasing power of a dollar declines, more dollars must be repaid to maintain the same purchasing power. Interest is one of the components of carrying charges; i.e., the cost of the money needed to finance the commodity's purchase or storage. The market rate of interest can also be used to establish an opportunity cost for the funds that are tied up in any investment. The CENTER ONLINE Futures Glossary
(1) A monetary benefit paid by a borrower for the right to use a lender's or a depositor's funds. Usually, the interest is paid periodically over the life of the loan, deposit, or security. However, some interest-bearing instruments, such as savings accounts, do not have defined maturities. Under the terms of some instruments, interest is not paid periodically over the life of the instrument but instead is paid solely at the end of the loan/deposit/security term.
(2) A right to enjoy some benefits of ownership of property. For example, the rights that a debtor or a court grants to a secured party in the assets owned by the debtor. Or, for example, the rights that a lessee is granted in the lease of property owned by a lessor. American Banker Glossary
The price paid for borrowing money. It is expressed as a percentage rate over a period of time and reflects the rate of exchange of present consumption for future consumption. Bloomberg Financial Dictionary
Also, a share or title in property. Bloomberg Financial Dictionary

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interest in‧terest [ˈɪntrst] noun
1. [uncountable] FINANCE an amount paid by a borrower to a lender, for example to a bank by someone borrowing money for a loan or by a bank to a depositor (= someone keeping money in an account there ) :

• Any spare cash is best put in a savings account where it will earn interest.

• US savings bonds will pay interest at 7.01% from May 1 through Oct. 31.

interest on

• a period during which you only pay interest on the loan and make no capital repayments

• Some credit cards don't charge interest on unpaid balances.

acˌcrued ˈinterest [uncountable] FINANCE
interest earned during a period of time, whether it has been paid and received or not:

• After five years the original loan has to be paid in full, plus all the accrued interest.

ˌadd-on ˈinterest [uncountable] FINANCE
interest calculated only on the principal (= the original amount borrowed) of a loan — compare APR
ˈbank ˌinterest [uncountable] FINANCE
interest paid by a bank on deposit S and to a bank on loans:

• You must declare bank interest you receive to the tax authorities.

ˈbond ˌinterest [uncountable] FINANCE
interest payable or paid to lenders on bonds:

• Mr Trump's Taj Mahal Casino might have trouble paying its junk bond interest.

ˈbuilding soˌciety ˌinterest [uncountable] FINANCE
the interest a building society pays to investors who have savings accounts:

• Building society interest is taxed under a special arrangement, and basic-rate tax does not have to be paid on it.

ˌcompound ˈinterest [uncountable] FINANCE
interest calculated on both a sum of money lent and on the unpaid interest already earned or charged on that money — compare simple interest
deˈbenture ˌinterest [uncountable] FINANCE
interest payable or paid to lenders on debenture S (= a type of bond):

• The company also said it can't pay debenture interest of $5.3 million due this month.

ˌgross ˈinterest [uncountable] TAX
interest before tax is taken away:

• Only non-taxpayers should be registered for gross interest.

imˌputed ˈinterest [uncountable] FINANCE
interest on a loan which is based on the difference between the market rates of interest, and the actual interest paid on the loan:

• Investors don't have to pay tax on imputed interest every year.

ˌnet ˈinterest
1. [uncountable] TAX interest from a bank account or an investment after tax is taken away:

• This cheque account pays net interest of 3.25%.

2. [uncountable] FINANCE the difference between interest that a person or organization receives from investments and interest that they pay for borrowing:

• The bank's net interest income increased by 19% last year.

ˌsimple ˈinterest [uncountable] FINANCE
interest calculated only on the principal (= the original amount invested), not on any accrued interest:

• I charged him 5% simple interest on the principal per week.

ˌtrue ˈinterest [uncountable] FINANCE
the interest that a particular sum of money would earn at a particular rate of interest to bring it to a known sum at the end of a particular period of time:

• The true interest cost on the Series A bonds is 6.262%.

2. [countable] FINANCE shares that you own in a company, or a part of a company that a person or organization owns; = HOLDING; STAKE:
true interest in

• Highlands Gold Ltd holds a 30% interest in the mine.

• He acquired interests in a number of publishing companies.

conˌtrolling ˈinterest [countable] FINANCE
enough shares to control a company:

• He bought a controlling interest in the firm.

maˌjority ˈinterest [countable] FINANCE
more than half of a company's shares, or enough shares to control the company:

• Roche acquired a majority interest in Genetech.

miˌnority ˈinterest [countable] FINANCE
less than half of a company's shares, or fewer shares than the biggest shareholder:

• Later in the year, AT&T sold a minority interest to other carefully selected companies.

ˌworking ˈinterest [countable] FINANCE
an interest held by a company in a particular activity, especially the oil industry:

• Amoco, an energy concern, is the operator of the project with a 43.75% working interest.

3. vested interest disapproving a group of people with strong reasons for wanting something to happen because they will gain an advantage from it:

• He is determined to prevent powerful vested interests from blocking the reform.

4. [countable] LAW the possession of rights, especially to land, property etc:

• The husband can release his interest in the legal estate to his wife.

ˌbeneficial ˈinterest \I've changed the def and moved this from sense 1. [uncountable] LAW FINANCE
the right to benefit from some property or a contract:

• The shares sold yesterday were held by a number of charitable trusts in which Sir David had a beneficial interest.

— see also conflict of interest, open interest, short interest

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interest UK US /ˈɪntrəst/ noun
[U] FINANCE money that is charged by a bank or other financial organization for lending money: interest charges/payments »

Interest charges on an overdraft are usually quite high.

charge/pay interest »

A number of providers don't charge any interest for an introductory period when you get one of their cards.

interest on sth »

The interest on a mortgage is higher than the interest earned on savings.


You can expect to pay interest of 4–6% on the loan.

with interest »

I paid back the whole sum with interest within a month.


monthly/annual interest

[U] FINANCE money that you earn from keeping your money in an account in a bank or other financial organization: earn/receive/pay interest »

You will earn interest at 4% as long as you have money in your account.


Consumers look for the best rate of interest on their savings.


You will receive interest payments on your investments monthly.


The account pays interest of up to 5%.


monthly/annual interest

[C] an involvement or a legal right, usually relating to a business or possessions that you own with other people: »

He is a multi-millionaire with business interests around the world.

an interest in sth »

The bank has a legal interest in the building until the money is repaid, as it was offered as security on the loan.

[S or U] the feeling of wanting to give your attention to something or of wanting to be involved with and to discover more about something: show interest (in sth) »

Customers are showing a lot of interest in this new design.

lose interest (in sth) »

Keep your points short and snappy when you make your presentation, or the audience might lose interest.

take an interest (in sth) »

Since our company featured in a national newspaper, people are starting to take an interest in what we do.

have an interest in sth »

I've always had an interest in aviation.


Just out of interest, how many people were at the conference?

[C] an activity that you enjoy doing or a subject that you like to spend time learning about: »

She lists her interests as music, running, and learning languages.

[U] the quality that makes you think that something is interesting: be of interest to sb »

I think this report would be of interest to you.

[C or U] something that brings someone advantages or that affects someone or something: »

A union looks after the interests of its members.


It's in your interests to keep careful records.


In the interests of safety, please do not smoke.


I believe it is in everyone's best interests if I resign.

See also ACCRUED INTEREST(Cf. ↑accrued interest), ADD-ON INTEREST(Cf. ↑add-on interest), BANK INTEREST(Cf. ↑bank interest), BENEFICIAL INTEREST(Cf. ↑beneficial interest), COMPOUND INTEREST(Cf. ↑compound interest), CONFLICT OF INTEREST(Cf. ↑conflict of interest), CONTROLLING INTEREST(Cf. ↑controlling interest), EX-INTEREST(Cf. ↑ex-interest), EXPRESSION OF INTEREST(Cf. ↑expression of interest), GROSS INTEREST(Cf. ↑gross interest), IMPUTED INTEREST(Cf. ↑imputed interest), MAJORITY INTEREST(Cf. ↑majority interest), MINORITY INTEREST(Cf. ↑minority interest), NET INTEREST(Cf. ↑net interest), SIMPLE INTEREST(Cf. ↑simple interest), TRUE INTEREST COST(Cf. ↑true interest cost), WORKING INTEREST(Cf. ↑working interest), VESTED INTEREST(Cf. ↑vested interest), ZERO INTEREST(Cf. ↑zero interest)

Financial and business terms. 2012.


Look at other dictionaries:

  • interest — in·ter·est / in trəst; in tə rəst, ˌrest/ n [probably alteration of earlier interesse, from Anglo French, from Medieval Latin, from Latin, to be between, make a difference, concern, from inter between, among + esse to be] 1: a right, title, claim …   Law dictionary

  • interest — INTEREST. s. m. Ce qui importe, ce qui convient en quelque maniere que ce soit, ou à l honneur, ou à l utilité, ou à la satisfaction de quelqu un. Interest public, general, commun. interest de famille. interest particulier. interest d honneur.… …   Dictionnaire de l'Académie française

  • Interest — In ter*est, n. [OF. interest, F. int[ e]r[^e]t, fr. L. interest it interests, is of interest, fr. interesse to be between, to be difference, to be importance; inter between + esse to be; cf. LL. interesse usury. See {Essence}.] [1913 Webster] 1.… …   The Collaborative International Dictionary of English

  • Interest —     Interest     † Catholic Encyclopedia ► Interest     Notion of interest     Interest is a value exacted or promised over and above the restitution of a borrowed capital.     ♦ Moratory interest, that is interest due as an indemnity or a… …   Catholic encyclopedia

  • interest — Interest, Versura, B. Prendre à interest, Versuram facere, B. ex Cic. Argent prins à interest, ou perte de finance, Circunforaneum aes. Tu y as interest, Ad te attinent, et tua refert. Il n y a point d interest, Non interest quid faciat morbum,… …   Thresor de la langue françoyse

  • interest — [in′trist, in′trəst, in′tər ist; ] also, esp. for v. [, in′tər est΄, in′trest΄] n. [ME interesse < ML usury, compensation (in L, to be between, be different, interest < inter , between + esse, to be: see IS1): altered, infl. by OFr interest …   English World dictionary

  • Interest — In ter*est, v. t. [imp. & p. p. {Interested}; p. pr. & vb. n. {Interesting}.] [From interess d, p. p. of the older form interess, fr. F. int[ e]resser, L. interesse. See {Interest}, n.] [1913 Webster] 1. To engage the attention of; to awaken… …   The Collaborative International Dictionary of English

  • interest — [n1] attraction, curiosity absorption, activity, affection, attentiveness, care, case, concern, concernment, consequence, diversion, engrossment, enthusiasm, excitement, game, hobby, importance, interestedness, into, leisure activity, matter,… …   New thesaurus

  • interest — ► NOUN 1) the state of wanting to know about something or someone. 2) the quality of exciting curiosity or holding the attention. 3) a subject about which one is concerned or enthusiastic. 4) money paid for the use of money lent. 5) a person s… …   English terms dictionary

  • Interest —   Interest is the charge or cost for using money; expressed as a rate per period, usually one year, called interest rate.   The reward for making funds available to a third party over a period of time, usually pre arranged …   International financial encyclopaedia

  • interest — is now normally pronounced in trist or in trest, with the first e unpronounced. The same applies to the derivative words interested, interesting, etc …   Modern English usage