Interest rate
Posted on:3/27/2006
| An interest rate is the price a borrower pays for the use of money he does not own, and the return a lender receives for deferring his consumption, by lending to the borrower. |
An interest rate is the price a borrower pays for the use of money he does not own, and the return a lender receives for deferring his consumption, by lending to the borrower. Interest rates are normally expressed as a percentage over the period of one year.
Interest rates are also a vital tool of monetary policy and are used to control variables like investment, inflation, and unemployment.
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