You might remember interest as the extra money you
may have to pay if you owe money on a credit card. Well,
interest isn’t always money you have to pay. Sometimes
it’s money that’s paid to you.
When you put money in a bank account, sometimes the
bank pays you interest for your money, called your yield.
For instance, Tangerine Bank pays 3% interest every
year. So, if you leave your money in your account, each
year you’ll end up with 3% more money than you
started out with. That means, if you open an account
with $100, you’ll earn 3% of $100, or $3, for
the first year. And your new total, or account balance,
will be $103. Plus, each year after that, you’ll
earn another 3% interest on your account balance.
