What is interest and why do we pay it?
Time's Rental Fee
What is interest and why do we pay it?
You want something now — maybe a car, maybe a house, maybe a guitar that costs more than you have in your pocket. But you're broke today. What do you do? You could wait and save... or you could borrow the money and have it right now.
When someone lends you money, they're giving up something real. They can't use that money themselves while you've got it. They can't buy their own guitar, or earn more money by investing it somewhere else. So they charge you a rental fee for borrowing their cash. That rental fee is called interest.
