In finance, interest is the price paid by a borrower for the use of a lender's money. In other words, interest is the amount of paid to "rent" money for a period of time. The original amount lent is called the principal, and the percentage of the principal which must be paid annually as interest is called the interest rate. Interest rates are crucial indicators in financial markets.

The existence of interest

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There are a variety of reasons which explain the why lenders charge interest for the use of their money:

• The time value of money: Most people would choose to have money in the present rather than money in the future. When asked to lend their current money in exchange for a promise to repay that money in the future, most lenders will agree only if they are repaid more than they originally lent. In effect, the interest rate is the payment for the use of money over time.

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NPR Topics: Politics & Society

Looking Back on Jesse Helms' Life
Fri, 04 Jul 2008 18:14:00 -0400
Sen. No, as he was often called, "was a real throwback," says Merle Black, a professor of southern politics at Emory University. One of a select group of politicians who helped solidify Republican control in the South, he had a loyal constituency of working-class whites in North Carolina.
Financial Aid Woes Make Community College More Appealing
Fri, 04 Jul 2008 16:05:00 -0400
Despite efforts by the Bush Administration and Congress to quell turmoil in the student loan market, some students are still struggling to find money for college. We examine the case of two recent high school graduates who have been promised financial aid, but don't know how much they can count on.
When Did Flag Pins Become So Important?
Fri, 04 Jul 2008 16:00:00 -0400
Sen. Barack Obama Obama was questioned about why he doesn't always wear a flag pin during a Democratic debate in April. His critics say his lack of pin casts doubt on Obama's patriotism, and recently the Democratic candidate has been wearing one.

The Talk of the Town

The Chill
Nick Paumgarten Mon, 30 Jun 2008 04:00:00 -0000
If you had stumbled into Banjo Jim’s, in the East Village, on a recent Wednesday night and encountered a sixty-something guy leading a band through a fervent rendition of “Wild Thing,” for an audience of two dozen or so, you might have concluded, “This is lame,” and slipped back . . .
Oily Speculations
James Surowiecki Mon, 30 Jun 2008 04:00:00 -0000
When bad things happen, it’s always nice to have a scapegoat. So, with Americans furious about soaring oil prices, Congress has gone in search of someone to blame. There are a number of usual suspects to choose from, depending on your politics--OPEC, greedy oil companies, lily-livered environmentalists opposed . . .
Obama’s Iraq Problem
George Packer Mon, 30 Jun 2008 04:00:00 -0000
In February, 2007, when Barack Obama declared that he was running for President, violence in Iraq had reached apocalyptic levels, and he based his candidacy, in part, on a bold promise to begin a rapid withdrawal of American forces upon taking office. At the time, this pledge represented conventional thinking . . .

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