💡Interest = the fee for borrowing money.

When someone borrows money, they pay the lender a fee💰

Typically this fee is a percentage of the borrowed amount, and this percentage is called an Interest Rate 🤑

Let’s say you borrow $1,000 from a friend at a 10% annual interest rate.

If you pay it back in a year, you'd pay $1,100, because you'd pay back the loan amount ($1,000) PLUS 10% of the loan as interest ($100) 🤓

Without interest rates, people would have no incentive to lend money to others 😔

If you need to borrow money, you’ll want a low-interest rate, since you'd pay less in interest 🥳

And if you lend people money, you would want to set a higher interest rate.

Then you’ll make more money off of your loan! 👀

Interest rates are the backbone of our economy since everyone -- including consumers, businesses and governments -- needs to borrow money 🎒

Now that you know about interest rates, let’s dive into why they’re so important. 🏊