What you'll learn
- Explain borrowing
- Understand that interest can add cost
Borrowing means using money now and promising to pay it back later. Sometimes borrowing has an extra cost called interest.
If someone borrows $20 and must pay back $22, the extra $2 is the cost of borrowing in this simple example.
Borrow carefully
Borrowing can help in some situations, but it is important to understand what must be repaid and when.
Simple example
Borrow $20, add $2 interest, repay $22 total. The math is $20 + $2 = $22.
Interactive exercise
Borrowing check
Answer a few simple questions about borrowing and repayment.
Lesson Progress
Finish the activity to complete this lesson.
2 On Finance provides general educational information and does not provide individualized financial, investment, tax, or legal advice.