Interest Income Definition Economics
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Whatever amount is paid to the owner of the capital for the use of the capital is known as interest.
Interest income definition economics. This revenue is typically taxable and reported in the other income section of the income statement. Interest the price paid for the use of credit or money. Here the capital is used in further production and whatever he earns he pays a part of his earnings to the owner of the capital or the lender of the money. For full treatment see capital and interest.
Interest income is the revenue earned by a lender for use of his funds or an investor on their investment over a period of time. At maturity for many fixed income. Interest also refers to the income figured as a percentage of principal that you re paid for purchasing a bond keeping money in a bank account or making other interest paying investments. Interest is the charge for the privilege of borrowing money typically expressed as annual percentage rate apr.
Interest can also refer to the amount of ownership a stockholder has in a company. A brief treatment of interest follows. Fixed income is a class of assets and securities that pay out a set level of cash flows to investors typically in the form of fixed interest or dividends. It may be expressed either in money terms or as a rate of payment.
If it is simple interest earnings are figured on the principal. Net interest income nii is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors.
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