What Is Interest?

Your Ultimate Guide To Understanding Interest

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What Is Interest?

You don't have funds, you make an agreement with a bank, credit card, lender to repay the loan after you get the money

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Understanding Interest on Debts

1. Mortgages

Mortgages pay off most of their principal

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2. Credit Cards

Revolving credit means the amount of credit once repaid can be borrowed again

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3. Personal Loans

Revolving credit means the amount of credit once repaid can be borrowed again

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4. Student Loans

Have $20k, $30k, $50k, even $100k in debt by the time you graduate

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Understanding Interest on Assets

1. Checking/Savings Accounts

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2. Investment Accounts

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There are many options for "investing" in a 401(k) or stocks, each with different levels of risk

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3. Moral of the Story

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What is interest? Only one of the most important financial concepts to understand