interest-payment

Vocabulary Word

Definition

An 'interest payment' refers to the extra money paid over the principal or borrowed amount as a compensation to the lender. It is commonly a part of repayments made on loans, credits, or bonds.

Examples in Different Contexts

In loans, 'interest payment' is a key factor in the total cost of borrowing. A loan officer might advise, 'To minimize your total interest payments over the life of the loan, consider making more than the minimum monthly payment.'

Practice Scenarios

Business

Scenario:

The loan you took last month has its first repayment due this week. Ensure to follow the repayment schedule as discussed.

Response:

I understand. I'll ensure that the interest payment for the loan will be made on time as per the repayment schedule.

Accounting

Scenario:

The corporate bond we issued last year has its first semi-annual payout in a month. We need to keep a close watch on our cash flow.

Response:

Agreed. I'll ensure that required funds for the corporate bond's interest payment are available by the end of this month.