Accrued interest
When you borrow money, like from the bank or a friend, you have to pay back the money plus a little bit extra called interest. Accrued interest is the extra money you have to pay back that gets bigger and bigger the longer you take to pay off your loan. It's like a snowball that keeps growing as it rolls down a hill.
Let's say your friend loaned you $10 and you have to pay back $11 in a week. Each day that goes by is like a slice of a pie. You don't have to pay back the whole $1 on the first day, but you have to add a little bit each day until the week is over. On the last day, you'll have to pay back the remaining $1 plus a slice of the accrued interest pie.
If you don't pay back the full amount on time, the accrued interest continues to grow and you'll have to pay back even more money than the original loan amount. That's why it's important to make sure you pay off your loans as soon as possible so you don't end up owing more than you borrowed.
Let's say your friend loaned you $10 and you have to pay back $11 in a week. Each day that goes by is like a slice of a pie. You don't have to pay back the whole $1 on the first day, but you have to add a little bit each day until the week is over. On the last day, you'll have to pay back the remaining $1 plus a slice of the accrued interest pie.
If you don't pay back the full amount on time, the accrued interest continues to grow and you'll have to pay back even more money than the original loan amount. That's why it's important to make sure you pay off your loans as soon as possible so you don't end up owing more than you borrowed.