Explain about interest rate, Macroeconomics

Assignment Help:

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.


Related Discussions:- Explain about interest rate

What are the potential disadvantages of growth, What are the potential disa...

What are the potential disadvantages of growth? The potential disadvantages of growth are as follows: • Raised pollution, • Depletion of non renewable natural resources

Gold standard after world war i, Did Germany ever go back on the Gold Stand...

Did Germany ever go back on the Gold Standard after World War I and prior to World War II? If so, what were the economic and political effects of doing so? I know it was on the Gol

Economies as a scope, If there are economies of scope and if the price for ...

If there are economies of scope and if the price for each product equals marginal cost, is it possible for a firm to cover all its costs? If the firm's average cost of production d

Net present worth for this new computer system, Kermit is considering purch...

Kermit is considering purchasing a new computer system. The purchase price is $106,430. Kermit will borrow one-fourth of the purchase price from a bank at 10 percent per year compo

Circular flow of income in an open economy, explain the effects of various ...

explain the effects of various injections and withdrawals and show the equilibrium in the circular flow

Balance of payment, what cause balance of payment curve to shift

what cause balance of payment curve to shift

Determine the long-term direct investment flows, Determine the Long-term di...

Determine the Long-term direct investment flows Long-term direct investment flows are when investors buy physical assets like land or capital equipment in another nation. This

Calculate constant vector, A particle at position I with velocity i has a...

A particle at position I with velocity i has acceleration w given by i = w x ( w x i ) where ? is a constant vector. Show by using the vector triple product and calcula

Multiplier, concept of multiplier - static and dynamic

concept of multiplier - static and dynamic

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd