What term refers to an amount paid for the use of money over a period of time?

The term that refers to an amount paid for the use of money over a period of time is interest. Interest represents the cost associated with borrowing money or the return earned on an investment. When a person or entity borrows funds, they typically pay interest to the lender as compensation for the opportunity to use the lender's money for a specified duration. This payment is usually calculated as a percentage of the principal amount, which is the initial sum borrowed or invested.

Understanding interest is crucial in financial contexts, such as loans, savings accounts, and investments, as it affects overall cost or return. This concept distinguishes it from other financial terms; for instance, principal refers to the original amount of money borrowed or invested without any interest included. Revenue refers to income generated from business operations, while dividends are payments made to shareholders from a corporation's profits—none of which directly relate to the cost of borrowing or the earnings from funds over time in the same way that interest does.