Interest

Definition of ‘Interest’

Interest is an expense of the business, it is the cost to the business of using a lender’s money. The percentage rate of interest or interest rate is the cost of borrowing for one year.

Financial Projections Template Interest Definition

The interest definition for use in the financial projections template is the cost of the debt finance used in the business.

Interest is calculated by applying the percentage interest rate to the average balance on the debt over the year.

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