Interest (Financial)
Cost of borrowing money; paid to lenders.
Formula
Interest = Principal × Rate × Time
Real World
When the Bank of England raised the base rate to 5.25% in 2023, small businesses with variable-rate loans saw monthly interest repayments surge, squeezing cash flow.
Exam Focus
Show the formula and substitute figures when given data; examiners award method marks even if your final answer is wrong.
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