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%.
 Cite this definition
Related Terms
bond, adjustable rate mortgage, applicable federal rate, Federal funds rate, average weighted maturity, bank rate, barometer, indicator, basis point, benchmark interest rate, broker loan rate, cap, ceiling, floor, consolidated bond, cost of debt capital, coupon rate, cyclical industry, discount rate, duration, econometrics, monetary policy, Federal Open Market Committee, Federal Reserve Board, fixed rate, adjustable rate, income risk, initial interest rate, rate lock, LIBOR, mortgage, loan, prepayment risk, present value, prime rate, rate-improvement, real interest rate, Regulation Q, renegotiable rate, rho, risk-free return, squeeze, standard payment calculation, usury, wraparound loan, yield curve, nominal rate, start rate, market rate
Related Research Articles from the InvestorGuide.com University
Choosing a Credit Card
Trying to find the right credit card? Learn how to evaluate fees, perks, and the associated fees before making your decision.
Credit Card Debt
Many people find themselves wasting money each and every month on high credit card interest rates. This article tells you how to avoid getting into credit card debt, and if you do, the best way to escape it.
Credit Mistakes
Your credit report may have errors on it, and this can hurt your ability to borrow. That's why it's important to check your credit reports periodically and get errors resolved. Here we describe the best procedure to follow to make sure you're protected so that errors don't hurt you. We also list the contact information of the three large credit reporting agencies: Experian, Equifax, and Trans Union.
Featured Sponsor
|
|
|
|
|
