Final answer:
A loan involves one party lending money or property to another party with the expectation of repayment with interest. It is a formal contract detailing the terms of the borrowing arrangement.
Explanation:
A loan is a type of financial arrangement where one party gives money or property to another party in exchange for repayment with interest. It is a formal contract that outlines the amount borrowed, the interest rate, and the repayment terms.
For example, if you go to a bank and borrow $1,000 to be repaid in a year, that would be considered a loan. The bank provides you with the money, and you agree to pay it back with interest over a specified period.
Loans are common in various settings, such as personal loans, student loans, mortgages, and business loans.
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