interest

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Interest, in finance and economics, is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. It is distinct from a fee which the borrower may pay the lender or some third party. It is also distinct from dividend which is paid by a company to its shareholders (owners) from its profit or reserve, but not at a particular rate decided beforehand, rather on a pro rata basis as a share in the reward gained by risk taking entrepreneurs when the revenue earned exceeds the total costs.For example, a customer would usually pay interest to borrow from a bank, so they pay the bank an amount which is more than the amount they borrowed; or a customer may earn interest on their savings, and so they may withdraw more than they originally deposited. In the case of savings, the customer is the lender, and the bank plays the role of the borrower.
Interest differs from profit, in that interest is received by a lender, whereas profit is received by the owner of an asset, investment or enterprise. (Interest may be part or the whole of the profit on an investment, but the two concepts are distinct from each other from an accounting perspective.)
The rate of interest is equal to the interest amount paid or received over a particular period divided by the principal sum borrowed or lent (usually expressed as a percentage).
Compound interest means that interest is earned on prior interest in addition to the principal. Due to compounding, the total amount of debt grows exponentially, and its mathematical study led to the discovery of the number e. In practice, interest is most often calculated on a daily, monthly, or yearly basis, and its impact is influenced greatly by its compounding rate.

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  1. A

    VIC Conflict of interest

    Is it a conflict of interest for the applicant father to have the law firm of his father/children’s grandfather represent him in a family law case? Does the law firm have the duty of full and frank disclosure to the court to disclose the grandfathers knowledge of past family violence orders...
  2. B

    VIC Public interest Disclosure

    I want to lodge a public interest disclosure against Dhs I can see a previous one has been lodged but to no avail. I want to find out a way to win against them. I have spoken to commonwealth ombudsman about this but I want to see some legal advice about it.
  3. T

    NSW Solicitor conflict of interest

    A solicitor represents two respondents in a case. If the solicitor is disinclined to entertain an offer of settlement to one of the respondents because it is not in the interests of the other (more important) respondent, can the applicant demand the settlement offer be passed on to the...
  4. Abused

    NSW Conflict of interest

    Curious what is conflict of interest in regards to legal representation if representatives are representing either party in a matter ie today an applicant impartial or respondent. Is a direct or perceived conflict legal? In relation to an area of law subject to my questions is it JUSTICE for 1...
  5. M

    VIC What is required if a life interest trustee sells the estate after one of the beneficiaries passes away?

    Can a trustee who has a life interest of the Net Income from an estate keep all the finances of sale if a beneficiary passes away before selling? The beneficiary had approved the sale of the estate before passing.
  6. L

    NSW How can an OC spare lot owners, who can pay their special levies in one go, from paying the strata loan interest like those who can't pay upfront?

    Situation: An Owners Corporation (OC) needs to strike a huge special levies to repair the building. Some of the owners can pay this special levies in one go, but others can't. In order to commence any building work, the OC is considering to borrow money from a bank and repay back over a 5 years...
  7. T

    NSW Court awarded interest and pecuniary penalty orders. Are they taxable?

    If the Federal Circuit Court orders an employer pay backpay, presumably the employee must declare it for tax, but what about interest and pecuniary penalty orders?
  8. S

    NSW Real Estate Agent is not working in my best interest

    Hi, I'm just after some advice if possible. We put our house on the market with an agent & the second person to view the property made a full price offer. He had no finance approved, so we didn't take it seriously. A week later the agent said he would send the sales advice to the Conveyancer...
  9. M

    QLD Witness conflict of interest

    In a Family Court trial can the other party Subpoena a witness to give evidence if you have a legal matter in place with that witness. Is this a conflict of interest?
  10. C

    Post Judgment Interest

    I have a post judgment debt that hasn’t been paid for 5 years. Can I get compound interest for late payment? I am confused how the old law on simple interest tors with commercial reality today.