Interest (Financial)
Cost of borrowing money; paid to lenders.
Formula
Interest = Principal × Rate × Time
Real World
When Elon Musk borrowed ~$13 billion to fund the Twitter acquisition, the interest payments alone ran to over $1 billion per year, severely pressuring the company's cash flow.
Exam Focus
Always show the interest calculation in full and then link it to the impact on profit or cash flow for full marks.
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