Interest, under capitalism, part of the profit which the investing capitalist, industrialist or merchant, pays the owner of loan capital for the right to use his monetary resources for a certain period. In its economic content interest is a converted form of surplus value. Its source is the entrepreneur’s profit. Part of the profit is transferred in the form of interest to the owner of the loan capital as payment for the use of the loan, while another remains in the possession of the investing capitalist in the form of income from business. The price of money loans is expressed in the interest rate which represents the relation between the amount of interest and the quantity of loan capital. The upper limit of the interest rate is the average (general) rate of profit, while the lower limit is undefinable, as idle capital is employed. The actual level of the interest rate is determined by the ratio between supply and demand for loan capital on the money market. As capitalism develops, the interest rate tends to decrease, which is explained, first, by the tendency of the average rate of profit to fall and, second, by the fact that, as the capitalist credit system develops, the supply of money has a growing margin over its demand. This trend, on the one hand, heightens the contradictions between the investing and loaning capitalists in their competitive struggle for a share of the profit, and, on the other hand, makes them more interested in intensifying the exploitation of the working class. Under state-monopoly capitalism, the state regulates the interest rate by using this regulation as an important financial and credit lever to influence the economy (see State Regulation of the Capitalist Economy). Under socialism, loan interest also exists, due to the existence of commodity-money relations, as well as cost-accounting and credit relations, but its nature is different. It represents part of the value of society’s net income created in the socialist economy and expressed in cash form; it is paid by enterprises to state banks for the temporary use of borrowed finances. Its rate is regulated by the state in a planned way in order that enterprises can rationally use loans and repay them on time. The interest serves to compensate the costs of maintaining credit institutions and provides their incomes, which are one of the sources of credit activities.