In­ter­est rates on the rise

The Week - Junior - - Home News -

On 2 Novem­ber, the Bank of Eng­land an­nounced that it was rais­ing in­ter­est rates for the first time in over a decade. In­ter­est is the cost of bor­row­ing money and the re­ward for lend­ing it. For ex­am­ple, if you want to bor­row £100 from the bank, the bank might say yes, but you will have to pay back the £100 and a lit­tle bit ex­tra. The ex­tra amount is the in­ter­est. The in­ter­est rate is the per­cent­age of the orig­i­nal amount that is added on. So if you bor­rowed £100 and the in­ter­est rate was 2%, you would have to give the bank £102 all to­gether. If you lend the bank money, by ask­ing it to look af­ter your sav­ings, it will re­ward you by giv­ing you a bit more money.

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