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# GLOSSARY

Finance Dictionary : Interest Rate

KEYTAKEAWAYS

Explore the world of Interest Rates, the pivotal percentages governing borrowing and earnings, influenced by product type and credit risk, with potential fluctuations.


CONTENT

DEFINITION

Interest Rate – The Percentage Governing Borrowing Costs and Earnings

 

An interest rate is a vital financial metric expressed as a percentage, which serves as the basis for computing the cost of borrowing money or the income generated from financial assets. These rates fluctuate across various financial products and are influenced by factors such as market conditions, credit risk, and the nature of the loan.

 

Interest rates can be categorized into two primary forms: fixed or variable. Fixed interest rates remain constant for the duration of a loan, providing predictability in repayment. In contrast, variable interest rates can change over time, potentially impacting borrowing costs and earnings.

 

Understanding interest rates is crucial for borrowers, investors, and policymakers. They impact the affordability of loans, the attractiveness of investments, and the stability of financial markets.


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We strive for accuracy in our content, but occasional errors may occur. Importantly, our information should not be seen as licensed financial advice or a substitute for consultation with certified professionals. CoinRank does not endorse specific financial products or strategies.


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