Interest—it’s either your best friend or your sneakiest enemy.

Let’s break it down in todays Finance Lesson, explaining what interest is, the different types, and how it affects borrowing and saving.

SECTION 1: INTEREST DEFINED. Interest is the cost of borrowing OR the reward for saving. You pay it on loans, but earn it on deposits!

SECTION 2: TYPES OF INTEREST. Number one, Simple Interest, Calculated only on your original amount. Great for short-term savings!

Number two, Compound Interest. It Earns interest on your interest, the secret to long-term growth!

Number three, Fixed vs Variable. Fixed stays predictable; variable changes with the market.

Let's see how it impacts in real-life. As an example, if you borrow ten thousand dollars at 5 percent interest. Over 5 years, You pay back $12,763, ultimately losing you $2,763. On the flipside of that, if you save ten thousand dollars at 5% over 5 years, you gain $2,763 of profit.

Master interest, and you master your money. I hope this video helps!