Before the 1500's most didn't charge for interest because they believed that charging interest was wrong. The Israelites considered lend money without interest a duty that the rich owed to the poor. Also during the Middle Ages, the church made it a sin to charge interest. People were caught charging interest were whipped.

But in 1545 King Henry of England changed the laws to let interest be used. By the 1700 charging interest was considered ok.

The types of interest are simple, compound and discount.

Simple interest is charged only on the amount borrowed. For example if someone borrows one hundred dollars for a year at ten percent interest then that person will have paid ten dollars.

Compound interest is charged by the amount borrowed and the accumulated interest. If you borrow one thousand dollars at ten- percent interest you will be charged one hundred dollars the first

Mortgage. Legal instruments those pledges a house or other real estate as security for repayment of a loan. By providing a guarantee that the loan will be paid back, a mortgage enables a person to buy property without having the funds to pay for it outright. If the borrower fails to repay the loan, the lender may foreclose on the property-that is, force the sale of the house to recover the amount of the loan.

Government policy. Government increases or decreases the amount of money available for loans, which in turn have an affect on interest rates. It does this through the nations central bank. The central bank requires all United States banks to setting aside a certain amount of their deposits on reserve. One way the fed controls the amount of money available for loans is by increasing or decreasing the reserve requirement. Federal Reserve System central banking system of the United States popularly called the Fed. A central bank serves as the banker to both the banking community and the government; it also issues the national currency, conducts monetary policy, and plays a major role in the supervision and regulation of banks and bank holding companies. In the U.S. these functions are the responsibilities of key officials of the Federal Reserve System: the Board of Governors, located in Washington, D.C., and the top officers of the 12 district Federal Reserve banks, located throughout the nation. The Fed.'s actions, described below, generally have a significant effect on U.S. interest rates and, subsequently, on stock, bond, and other financial markets.

Some common words found in the essay are:
Henry England, French Revolution, Federal Reserve, Mortgage Legal, Deregulation Committee, , Reserve System, Protection Act, Ages Economic, Middle Ages, amount money, money available, available loans, money available loans, amount money available, hundred dollars, lend money, federal reserve, thousand dollars, central bank, federal reserve system, borrow money, term loans five, loan agreement, 1 demand loans,
Approximate Word count = 1446
Approximate Pages = 6 (250 words per page double spaced)