Lessons On Simple And Compound Interest With Worksheets

Introduction

The interest term has been in use since ancient Mesopotamia which dates back to 2400 BC. This civilization used the terms simple and compound interests to purchase and lend loans. The term interest kept evolving and adapted in economics with more terms and refinements by the time.

By the 19th century the terms simple interest, compound interest and the rate of interest were commonly used in banks and financial institutions.

The few examples of the interests which can be seen in daily life are from banks and money lenders. The banks give interest on the money deposited by a person in the bank account. Interest is the extra amount of money that a bank gives to the person.

Money lenders charge the interest on the money which they lend to people. Here, the interest is the extra amount of money charged in addition to the money he lent to the borrower. When the borrower returns the money, he pays back the original amount he lent plus the interest on it.