What is the interest theory in western economics?

The concept of interest is the reward that the owner of the fund gets by lending the fund to the country, which comes from part of the profits formed by the producers using the fund to play their business functions. Refers to the value-added amount brought by the injection and return of monetary funds to the real economy. Its calculation formula is: interest = principal × interest rate × time. The real interest rate theory of western economics is the reward of actual constraints and the income of real capital. Real interest rate ultimately depends on initial productivity factors, such as technology, resource availability and capital stock. From17th century, classical economists began to study interest systematically, and until 1930s, the theory of real interest was always in a dominant position in the field of interest research. Monetary interest theory holds that interest is the cost of borrowing money and selling securities, as well as the income from lending and buying securities. As a monetary phenomenon, interest rate is completely determined by the supply and demand of money.