In finance and economics, interest is the payment from a borrower to a lender of an amount above the repayment of the principal sum, at a particular rate. It is the cost of borrowing money or the return earned on an investment, typically expressed as an annual percentage rate (APR)
. Interest can be simple or compound, and it is a fundamental component of economic theories and financial transactions
. It is the amount charged on top of the principal by a lender to a borrower for the use of assets, and it can be thought of as the "cost of money"
