Interest Income

Accounting Dictionary

Interest Income

The money that is earned by allowing other people to use your monetary assets.

Tom needs $100,000 to start a business. The bank says they will loan him the money at 15% interest. This means that every year Tom has to pay the bank $15,000 (.15 x $100,000) until the money is repaid. The $15,000 is interest income to the bank.

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