This is how your interest rate is calculated

Economists expect that the South African Reserve Bank will cut the repo rate on Thursday, giving consumers a little more breathing room when it comes to their finances.

But do you understand what this means for your wallet and how the actions you take could save or cost you?

Consumers will say everybody keeps telling them to save and save more, but the language of money and saving can be confusing, says Cheslyn Jacobs, chief commercial officer at TymeBank.

We asked him to explain the key terms of saving to help consumers understand what the numbers mean:

What are interest rates?

An interest rate is a percentage charged or paid on the total amount you borrow or save, Jacobs says.