Interest problem

As a percent (per year) of the amount borrowed is called interest. 

Borrow $1,000 from the Bank
	Alex wants to borrow $1,000. The local bank says "10% Interest". So to borrow the $1,000 for 1 year will cost: $1,000 × 10% = $100

In this case the "Interest" is $100, and the "Interest Rate" is 10% (but people often say "10% Interest" without saying "Rate")

Of course, Alex will have to pay back the original $1,000 after one year, so this is what happens:

Alex Borrows $1,000, but has to pay back $1,100

This is the idea of Interest ... paying for the use of the money.

There are special words used when borrowing money, as shown here:

Alex is the Borrower, the Bank is the Lender. The Principal of the Loan is $1,000. 

The Interest is $100