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Simple English definitions for legal terms
conventional interest
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A quick definition of conventional interest:
Conventional interest is when someone earns money by lending it to someone else. It's like when you give your friend some money and they promise to pay you back with a little extra. That extra money is the interest. Interest can also mean having a legal right to something, like a piece of property or money. There are different types of interests, like a direct interest which is a definite right, or a contingent interest which you can only get if something else happens first.
A more thorough explanation:
Conventional interest is a type of interest that is agreed upon by both parties in a financial transaction. It refers to the amount of money that a borrower agrees to pay a lender in exchange for borrowing money.
For example, if you take out a loan from a bank, you will have to pay back the amount you borrowed plus interest. The interest rate is agreed upon by both you and the bank, and it is usually expressed as a percentage of the amount borrowed.
Another example of conventional interest is the interest you earn on a savings account. When you deposit money into a savings account, the bank pays you interest on that money. The interest rate is agreed upon by both you and the bank, and it is usually expressed as a percentage of the amount deposited.
Overall, conventional interest is a common aspect of financial transactions and is used to compensate lenders for the use of their money.