What is interest?

Interest is extra money you get for letting someone else use your money.

Imagine you have a piggy bank full of coins. You decide to lend it to your friend so they can buy ice cream for everyone at school. In return, they give you some extra candies, that’s like interest.

Let’s say you gave your friend 10 coins. After one week, they come back and give you 1 more coin as a thank-you. That extra coin is the interest.

Now imagine instead of giving them just 10 coins for a week, you let them use your money for months or even years, then the number of candies (or coins) you get would be bigger too.

People love interest because it helps their money grow without them having to do anything extra. It’s like when you plant a seed and it grows into a big tree, you didn’t have to water it every day, but it still grew stronger.