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The term "interest" originates from the Latin word "interesse," meaning "to be between" or "to concern." In finance, it refers to the cost of borrowing money or the return on investment, reflecting the time value of money. Essentially, it represents the compensation lenders receive for providing capital and the opportunity cost for borrowers who use those funds instead of investing them elsewhere. Thus, it embodies the relationship between the lender and borrower regarding the use of money over time.

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2mo ago

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