Final answer:
Interest is the income earned from lending money over time, with the interest rate being the percentage charged on the principal loan amount.
Explanation:
Interest is the income earned from lending savings to others over a period of time. It is usually expressed as a percentage of the principal amount lent per year. For example, if someone lends \($1,000 and receives $\)1,050 back after a year, the interest earned is $50, making the interest rate 5%.
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