1. Interest is the use fee of money in a certain period of time, which refers to the remuneration that money holders (creditors) get from borrowers (debtors) for lending money or monetary capital. Including deposit interest, loan interest and interest incurred by various bonds. Under the capitalist system, the source of interest is the surplus value created by hiring workers. The essence of interest is a special transformation form of surplus value and a part of profit.

2. Compound interest refers to an interest-bearing method in which the interest generated in previous interest-bearing periods is calculated in the next interest-bearing period in addition to the interest generated by the principal of a fund.

3. The penalty interest is the overdue fine paid by the borrower due to his failure to repay the loan on the specified date. Lenders can postpone the loan, at which time the lender will generally modify the original term, and during the remaining loan period, the lender will raise the interest rate, which is called default interest rate.

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Marxism believes that interest is a part of profit and a transformation form of surplus value. Money itself can't create money, and it won't add value by itself. Only when the functional capital buys the means of production and labor with money can it create surplus value through the labor of hiring workers in the production process. The monetary capitalist, by virtue of the ownership of capital, shares the surplus value with the functional capitalist. Therefore, the separation of capital ownership and capital use right is the inherent premise of interest generation.

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