by 
The Curious Bag
-
An understanding of what debt means is necessary to function in modern society. At some point or other, most people find themselves in some sort of debt. Debt involves owing something to someone else, with the expectation that it will be repaid.
Dictionary Definition
Merriam Webster's defines the word debt as "something owed" or a "state of owing." Princeton's WordNet defines debt as "an obligation to pay or do something."
Etymology
The word debt comes from the Middle English word dette, which stems from the Latin noun debitum and the Latin verb debere, meaning to owe.
Use in Finance
If you borrow money, you are in debt. Forms of borrowed money include student loans, mortgages and credit cards. Before the money is loaned, an agreement for repayment is reached between both parties.
Interest
Interest is a fee paid to borrow money. The rate can be fixed, meaning it does not change over the life of the loan, or variable, meaning it is subject to fluctuation.
Fun Fact
A debt clock located in New York City's Times Square tracks the amount of debt the U.S. has. The clock ran out of digits in 2008. An updated version of the clock, which will be able to display a quadrillion dollars, is planned.
Source:
RELATED QUESTIONS
Copyright 2023, Wired Ivy, LLC