interest
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interest
The price paid for borrowed money or received for invested money, usually given as a percentage of the capital. Often used in the plural, 'Zinsen' (interest).
Für den Kredit müssen wir jährlich 5 Prozent Zinsen zahlen.
We have to pay 5 percent interest annually on the loan.
interest and compound interest
A fixed expression that describes the effect in which interest that has already been received also earns interest again, leading to exponential growth.
Durch den Effekt von Zins und Zinseszins kann ein kleines Vermögen über lange Zeit stark anwachsen.
Through the effect of interest and compound interest, a small fortune can grow significantly over a long period of time.
Although the singular 'der Zins' (interest) exists, in everyday language and financial language the plural 'die Zinsen' is almost always used. This is common even when you are talking about a single interest rate.
Die Zinsen für Baukredite sind im letzten Jahr gestiegen.
Interest rates for construction loans rose last year.
In connection with interest, the verbs typically used are 'zahlen' (to pay, for a loan), 'bekommen' (to get) or 'erhalten' (to receive, for an investment), and 'anfallen' (to accrue, when interest arises).
Für mein Sparkonto bekomme ich zurzeit kaum Zinsen.
I'm currently getting hardly any interest on my savings account.
The word 'Zinseszins' (compound interest) is a good example of a German compound word. It consists of 'Zins' (interest), the linking -s '-es-', and 'Zins' again. It literally means interest on interest.
Albert Einstein soll den Zinseszins als achtes Weltwunder bezeichnet haben.
Albert Einstein is said to have called compound interest the eighth wonder of the world.
return / yield
Zins and Rendite both describe a return on capital. Zins is the agreed compensation for borrowed or invested money. Rendite, on the other hand, shows the overall performance of an investment in relation to the capital invested and a specific period of time.
Der Zins für das angelegte Geld beträgt drei Prozent pro Jahr.
The interest on the invested money is three percent per year.
Die Rendite der gesamten Anlage beträgt nach einem Jahr drei Prozent.
The return on the entire investment is three percent after one year.
