Borrowing money is a privilege and for this, there is a price to pay. The price, called interest is usually expressed as a percentage and as the borrower, you are required to pay back the money you borrowed plus the interest rate or percentage of the loan.
For example…
In order to enable expansion of his tutoring business, let’s say Connor needed to buy several desks and chairs. As he didn’t have the finances required on hand, he borrowed $5000 as a business loan. The financial institution he borrowed from set an interest rate of two percent over a three month period. This means Connor has to pay a hundred dollars in interest when he repays his loan in three months.
