InvestorWords.com
interest rate
Definition
A rate which is charged or paid for the use of money. An interest rate is often expressed as an annual percentage of the principal. It is calculated by dividing the amount of interest by the amount of principal. Interest rates often change as a result of inflation and Federal Reserve policies. For example, if a lender (such as a bank) charges a customer $90 in a year on a loan of $1000, then the interest rate would be 90/1000 *100% = 9%.
Recommended Articles from InvestorGuide.com
Featured Tip
How to Find Government Incentives for First-Time HomebuyersWhen buying a house, look into government incentives for first-time homebuyers, low- or moderate-income families and other borrowers. Eligible applicants can save on the interest rate, closing costs, ... Read more
Additional Tip(s)
- Two Credit Cards are Better than One, But More Isn't Always Better
- How to Avoid High Interest Rates on Credit Cards
- A Good Credit Record and Why You Should Have One
- 4 Ways to Save Money by Refinancing
- Basic Sets of Data Affecting Forex Prices
- Paying Off Mortgages
- Bond Spreads: A Leading Indicator For Forex
- Loans Against Your Home's Equity
- Why Fixed-Rate Loans are Better
Search for a term
interest rate is ...
... part of the Lending & Credit subject.
... #54 on our list of the most popular terms.









