Fixed interest
Imagine you have some money and you want to earn more money from it. One way to do that is by putting your money in a special place called a bank. When you put your money in the bank, they will pay you more money over time. This extra money is called interest.
Now, there are different types of interest. One type is called fixed interest. Fixed interest means that the bank promises to pay you a certain amount of extra money at a fixed rate for a fixed period of time.
Let's say you put $100 in the bank with a fixed interest rate of 5% for 1 year. This means that the bank will add 5% of your $100 to your original amount at the end of the year. So, after one year, you will have $100 plus 5% of $100, which is $5. So, you will have a total of $105.
The important thing to remember about fixed interest is that it stays the same over time. It doesn't change. If the bank promises to pay you 5% fixed interest for 1 year, it will always be 5% no matter what happens in the world.
Fixed interest can be a good thing because it gives you a predictable way to make your money grow. You know exactly how much extra money you will get at the end of the fixed period.
However, there are also some disadvantages to fixed interest. For example, if the interest rates in the world go up and become higher than the fixed interest rate that you agreed with the bank, you may miss out on the opportunity to earn more money. This is because you are stuck with the lower fixed rate.
On the other hand, if the interest rates in the world go down, having a fixed interest rate can be a good thing because you will still earn the same amount of extra money even if everyone else is earning less.
So, in summary, fixed interest is when a bank promises to pay you a certain amount of extra money at a fixed rate for a fixed period of time. It can be a good way to make your money grow, but it also has its drawbacks.
Now, there are different types of interest. One type is called fixed interest. Fixed interest means that the bank promises to pay you a certain amount of extra money at a fixed rate for a fixed period of time.
Let's say you put $100 in the bank with a fixed interest rate of 5% for 1 year. This means that the bank will add 5% of your $100 to your original amount at the end of the year. So, after one year, you will have $100 plus 5% of $100, which is $5. So, you will have a total of $105.
The important thing to remember about fixed interest is that it stays the same over time. It doesn't change. If the bank promises to pay you 5% fixed interest for 1 year, it will always be 5% no matter what happens in the world.
Fixed interest can be a good thing because it gives you a predictable way to make your money grow. You know exactly how much extra money you will get at the end of the fixed period.
However, there are also some disadvantages to fixed interest. For example, if the interest rates in the world go up and become higher than the fixed interest rate that you agreed with the bank, you may miss out on the opportunity to earn more money. This is because you are stuck with the lower fixed rate.
On the other hand, if the interest rates in the world go down, having a fixed interest rate can be a good thing because you will still earn the same amount of extra money even if everyone else is earning less.
So, in summary, fixed interest is when a bank promises to pay you a certain amount of extra money at a fixed rate for a fixed period of time. It can be a good way to make your money grow, but it also has its drawbacks.