Every time money exchanges hands, or a transaction is made, banking takes place. No matter how big or small the denominations are, the way we bank our money has a great influence on the economy -- by paying or investing in goods and services, banking determines supply and demand, drives commerce, and decides market value.
In banking, it's important to remember that interest plays a significant role for the banker and the consumer. With a deposit product, like savings or checking, account holders can earn interest; the amount one receives is calculated according to a figure called an APY, or Annual Percentage Yield. For loans, a banker or lender charges a borrower interest to pay back; in this case, the rate is called an APR, or Annual Percentage Rate.