A bank is a company that has to make money to pay for expenses as well as making a profit
People put money into banks to keep it safe and have a good liable place.
The bank gives us more money for keeping it n there that’s called interest
When people get a loan they take some of your money to give it to them and we pay interest for a loan for the amount of time it takes you to pay them back
The most common time it takes to pay off a loan for a car in America is 5 years but for a house its 30 years
If we had 2% of interest for savings and 4% for loan and we have 100 dollars and we put it in savings the bank gives us 2$ so they have -2$ and if for a loan, we will have 4 dollars. The bank makes 2$
Interest is the amount of money the bank pays you to keep money in the bank or the amount of money the bank receives for lending you money, Its always a percent and the percent is called an interest rate is used to calculate
4% interest on a car loan means you will pay 4 percent of the loan you take on top of the amount you take
Most loans are calculated with compound interest
Compound interest is interest on interest.
What this means is that when you give the bank money each year the internist for them rises. Just like in Charlayne’s situation