Q. Explain about Interest rate?

When you borrow money, you normally have to pay a fee for the loan. This fee is frequently known as interest, especially if the fee is proportional to amount you borrow. Interest rate is commonly represented as a percentage of the size of the loan per unit of time, characteristically per year. If interest rate is 10% per year, you should, for instance, pay 1,000 per year if you borrow 10,000. 

Interest rate may be floating orfixed. If it is fixed, you would pay the same percentage for the complete duration of the loan. With a floating interest rate, interest rate will change regularly depending on market conditions.

Interest rate for a specific loan relies on the general level of interest rates as well as the specifics of the loan. Factors like risk (probability that loan won't be repaid), duration of the loan and whether you select a fixed or a floating rate will influence the interest rate.

Posted Date: 8/13/2013 3:03:13 AM | Location : United States

Ask an Expert

Related Discussions:- Explain about interest rate, Assignment Help, Ask Question on Explain about interest rate, Get Answer, Expert's Help, Explain about interest rate Discussions

Write discussion on Explain about interest rate
Your posts are moderated

Write your message here..

Related Questions

Pine village needs some additional recreation fields, Pine Village needs so... Pine Village needs some additional recreation fields. Construction will cost $225,000 and annual O&M expenses are $85,000. The city council estimates that the value of added youth

Illustrate neo-classical growth model, Q. Illustrate neo-classical growth m... Q. Illustrate neo-classical growth model? The main purpose of another significant growth model, neo-classical growth model, is to explain how it is possible to have a permanent

Money multiplier and credit multiplier, why is credit multiplier lower than... why is credit multiplier lower than money multiplier

A spiral approach and a waterfall approach, What is the difference in chang... What is the difference in changing the scope between a spiral approach and a waterfall approach? Ans) The scope of needs changes in Waterfall model is less than that in Spiral M

Illustrate the overview and importance of macroeconomics, Illustrate the ov... Illustrate the overview and importance of macroeconomics? After familiar with this illustration, able to know: a. An overview of macroeconomics is the study about the econom

National income, farmer grows a bushel of wheat & sells it to a miller for ... farmer grows a bushel of wheat & sells it to a miller for Rs. 1.00. The miller turns the wheat into flour & then sells the flour to a baker for RS. 3.00. The baker uses the flour

Calculate weights of a and b in the global minimum variance , Consider two ... Consider two perfectly negatively correlated risky securities A and B. A has an expected rate of return of 12% and a standard deviation of 17%. B has an expected rate of return of

Question one hw, A small country can import a good at a world price of 10 p... A small country can import a good at a world price of 10 per unit. The domestic supply curve of the good is S = 20 + 10P The demand curve is D = 400 – 5P In addition, each unit of

How to find nominal gdp in the current year, Consider an economy that produ... Consider an economy that produces only three types of fruit: apples, oranges & bananas. In the base year the production & price data are as follows: Fruit

Purchasing power, One problem in using exchange rate when comparing GDP per... One problem in using exchange rate when comparing GDP per capital between countries is that is fluctuates a lot. A way of avoiding dependence on exchange rate is to use purchasing