/in"teuhr ist, -trist/, n.1. the feeling of a person whose attention, concern, or curiosity is particularly engaged by something: She has a great interest in the poetry of Donne.2. something that concerns, involves, draws the attention of, or arouses the curiosity of a person: His interests are philosophy and chess.3. power of exciting such concern, involvement, etc.; quality of being interesting: political issues of great interest.4. concern; importance: a matter of primary interest.5. a business, cause, or the like in which a person has a share, concern, responsibility, etc.6. a share, right, or title in the ownership of property, in a commercial or financial undertaking, or the like: He bought half an interest in the store.7. a participation in or concern for a cause, advantage, responsibility, etc.8. a number or group of persons, or a party, financially interested in the same business, industry, or enterprise: the banking interest.9. interests, the group of persons or organizations having extensive financial or business power.10. the state of being affected by something in respect to advantage or detriment: We need an arbiter who is without interest in the outcome.11. benefit; advantage: to have one's own interest in mind.12. regard for one's own advantage or profit; self-interest: The partnership dissolved because of their conflicting interests.13. influence from personal importance or capability; power of influencing the action of others.14. Finance.a. a sum paid or charged for the use of money or for borrowing money.b. such a sum expressed as a percentage of money borrowed to be paid over a given period, usually one year.15. something added or thrown in above an exact equivalent: Jones paid him back with a left hook and added a right uppercut for interest.16. in the interest(s) of, to the advantage or advancement of; in behalf of: in the interests of good government.v.t.17. to engage or excite the attention or curiosity of: Mystery stories interested him greatly.18. to concern (a person, nation, etc.) in something; involve: The fight for peace interests all nations.19. to cause to take a personal concern or share; induce to participate: to interest a person in an enterprise.20. to cause to be concerned; affect.[1225-75; (n.) ME < ML, L: it concerns, lit., it is between; r. interesse < ML, L: to concern, lit., to be between; (v.) earlier interess as v. use of the n.; see INTER-, ESSE]
* * *It is usually figured as a percentage of the money borrowed and is computed annually. Interest is charged by the lender as payment for the loss of his or her money for a period of time. The interest rate reflects the risk of lending and is higher for loans that are considered higher-risk, a relationship known as the risk/return tradeoff. Like the prices of goods and services, interest rates are responsive to supply and demand. Theories explaining the need for interest include the time-preference theory, according to which interest is the inducement to engage in time-consuming but more productive activities, and the liquidity-preference theory of John Maynard Keynes, according to which interest is the inducement to sacrifice a desired degree of liquidity for a nonliquid contractual obligation. Interest rates may also be used as a tool for implementing monetary policy (see discount rate). High interest rates may dampen the economy by making it difficult for consumers, businesses, and home buyers to secure loans, while lower rates tend to stimulate the economy and encourage both investment and consumption.
* * *the price paid for the use of credit or money. It may be expressed either in money terms or as a rate of payment. A brief treatment of interest follows. For full treatment, see capital and interest.Interest may also be viewed as the income derived from the possession of contractual promises from others to pay sums in the future. The question may be asked, “What is the value today of a promise to pay $100 a year from now?” If the answer is $100, then no interest income is generated. Most people, however, would require an inducement to give up $100 today and for the next year. If $5 were sufficient inducement—that is, if they would buy such a promise for $95—then interest income of $5 has been generated at a rate of just over 5 percent.Various theories have been developed to account for and justify interest. Among the better known are the time-preference theory of the Austrian, or Marginalist, school of economists, according to which interest is the inducement to engage in time-consuming but more productive activities, and the liquidity-preference (liquidity preference) theory developed by J.M. Keynes, according to which interest is the inducement to sacrifice a desired degree of liquidity for a nonliquid contractual obligation. It may be mentioned that in Marxist theory interest, like capital itself, is a portion of labour expropriated by the capitalist class by virtue of its political power.
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