A literal interpretation is explaining something based on the literal meaning of the words or story, rather than the metaphorical meaning. For example, in Jack and the Beanstalk, the literal interpretation is that he actually climbed a beanstalk into a palace in the sky and found a golden egg. The metaphorical meaning is that he received wisdom, nurtured it, and it grew exponentially. Though the wisdom itself may not have been worth money, it led to wealth and success that could not be accessed another way. You see?
