What is the term for the percentage paid for the use of capital?

The term for the percentage paid for the use of capital is interest. Interest represents the cost of borrowing money or the return on invested capital, typically expressed as a percentage of the principal amount. It serves as a reward for lenders who provide funds and compensates them for the opportunity cost of using their money in one investment rather than another.

In the context of economics, capital can refer to financial capital, which businesses and individuals use to fund their operations and investments. When capital is borrowed, the lender expects to be compensated for the risk and the time value of money, which is expressed through the interest rate. This concept is crucial in understanding how investments and borrowing function in the economy.