Interest Rates
Interest rates are the cost of borrowing money, or the return on an investment. They are expressed as a percentage of the principal, or original amount borrowed or invested. Interest rates are determined by a variety of factors, including the borrower’s creditworthiness, the type of loan or investment, and the length of the loan or investment. Interest rates can be fixed or variable, and can be affected by economic conditions, government policies, and other factors.
History of Interest Rates
Interest rates have been around since ancient times, when they were used to determine the cost of borrowing money from a lender. In the Middle Ages, interest rates were set by the Church, and were often very high. In the modern era, interest rates are determined by a variety of factors, including the borrower’s creditworthiness, the type of loan or investment, and the length of the loan or investment. Interest rates can also be affected by economic conditions, government policies, and other factors.
Interest Rate Comparison Table
| Type of Loan | Interest Rate |
|---|---|
| Mortgage | 3.5% |
| Car Loan | 4.5% |
| Credit Card | 14.9% |
| Savings Account | 0.5% |
Summary
Interest rates are the cost of borrowing money, or the return on an investment. They are expressed as a percentage of the principal, or original amount borrowed or invested. Interest rates are determined by a variety of factors, including the borrower’s creditworthiness, the type of loan or investment, and the length of the loan or investment. Interest rates can be fixed or variable, and can be affected by economic conditions, government policies, and other factors. For more information about interest rates, you can visit websites such as Bankrate.com, Investopedia.com, and the Federal Reserve Bank of St. Louis.
See Also
- Compound Interest
- Annual Percentage Rate (APR)
- Prime Rate
- Discount Rate
- Inflation
- Credit Score
- Debt-to-Income Ratio
- Fixed Rate Mortgage
- Variable Rate Mortgage
- Certificate of Deposit (CD)
