Interest Rates

When money is loaned out, the customer pays the loan back with a fee. The fee is predetermined at a specific rate. This is called an interest rate.

1,771 Questions
Interest Rates

Are interest rate and coupon rate the same?

Actually they mean the same thing but they are used in two totally different situations.

Interest Rate is the money paid by a bank that has accepted a deposit from a Customer.

Coupon Rate is the money paid by a person who has issued Bonds to people in return for the money they have given him.

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Interest Rates

What is an average CD interest rate?

Although each situation varies the average CD interest rate today is about 3.00%. It is beneficial to look into differant banking institutes to see who can give the best interest rates.

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Which country has the lowest bank interest rate?

United States of America at 0 to 0.25.

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Interest Rates

What is normal interest rate on sovereign debt?

There is no 'normal' interest rate on sovereign debt. The initial rates are set at the sovereign debt auctions. Investors offer to buy a debt issue or a proportion of the issue at a certain interest rate. The offer is greatly influenced by the investors' own perception of the debt issuer (country) ability to repay its debt + demand for the issue + country sovereign debt rating.

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Interest Rates

How does interest rate work on a credit card?

You are charged an annual intrest rate for example 18%. Intrest is calculated by the day. For example if you want to know how much a company is charging you per day for a balance all that you need to do is take the intrest rate that is being charged divide that by 365 ( days in a year) and then multiply that by the amount of your balance. For example your balance is $1000.00 your intrest rate is 18% 18%/365=0.0004931 0.0004931 x 1000.00=$.049 in this example you are being charged $.49 per day wich would equal about $180.00 per year for a $1000.00 balance. But keep in mind that the credit card companies are going to chare you intrest on the intrest that accrues so you would end up paying more than the $180.00 per year

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Singapore
Interest Rates

What is the rate of Risk-Free interest in Singapore?

At the moment, virtually 0%

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Interest Rates

The interest rate policy is a component of?

Monetary Policy

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Interest Rates

What is the rate of Risk-Free interest in India?

8%

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What is the lowest interest rate in the country?

The "prime" rate, which is regulated by the Federal Reserve Commission, with its' well-known chairman, Alan Greenspan. Prime is the interest rate that is charged to banks and lending institutions. It is THE basic rate which determines all other rates.

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Interest Rates

What was the rate of mortgage interest in 1965?

The mortgage rate in 1965 was about 6%.

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Interest Rates

Continuously compounded interest- solve for interest rate?

r=ln((A/P)^1/t)

Where:

A is the Final amount

P is the Initial amount

t is the time passed

r is the interest rate

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Interest Rates

How does bankruptcy affect interest rates on loans?

Some lenders may find you a higher risk and thus charge you a higher interest rate.

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Interest Rates

How do interest rates affect consumption?

Real interest rates influence the level of household consumption in a country. Consumption of durable goods is interest sensitive, since households will sometimes finance the purchase of "big ticket items" such as automobiles, household appliances, computers, televisions, and other goods through borrowing. Households will respond to higher real interest rates by decreasing their consumption of these non-essential items since it becomes more costly to borrow when interest rates rise.

Real interest rates are determined by taking the nominal interest rate, which is the actual percentage charged by banks for a loan, and subtracting the rate of inflation. For instance, a nominal interest rate of 5% in a situation where unanticipated inflation is 2% equates to a real interest rate of 3%. Households consider the real rate of interest when deciding to purchase durable goods requiring financing.

If inflation is anticipated, banks will charge higher nominal interest rates to borrowers and therefore anticipated inflation has little or no effect on the real interest rate and consumption. Nominal interest rates rise with anticipated inflation as banks must charge higher rates to maintain their profits, since inflation erodes the value of money and a borrower would be paying back money worth less than the money he borrowed if nominal rates were not increased. However, if there is unanticipated inflation, or inflation greater than the rate anticipated by banks and incorporated into the rate charged to borrowers, then this will reduce the real interest rate and induce households to spend on durable goods, since the opportunity cost of holding money (the inflation rate) increases while the opportunity cost of spending money (the nominal interest rate) remains the same.

During periods of unanticipated inflation, the real interest rate falls and households are more likely to consume more at every level of disposable income. If there is unanticipated deflation (a decrease in the price level), then the real interest rate rises, and since households would now have to pay back their lending banks with money worth more than that borrowed, the incentive is to save more and decrease consumption. A rise in real interest rates caused by a decrease in the price level results in less consumption at each level of disposable income.

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Interest Rates

What are the disadvantages and advantages of interest rates?

Interest rates are generally applied to cover the collateral risk of defaulting loans. A borrower is compensating the lender for the length of time that money is held - money that the lender could have invested elsewhere.An analogy is that I borrow you a pen. Then when I ask you to return it, I request that you give back 10 additional pens in compensation because I could have used that pen to write a novel.

AdvantagesThe main advantages of interest rates are the profits to the lender from loaning money. This encourages the flow of credit.

During periods of high inflation, interest rates are applied to curb the price of goods and services.

Another advantage is the return rewarded to those who invest money into savings. As savings are relatively risk free in comparison to other investments, during periods of high interest rates the level of yield can be favourable only if the savings are of a large amount.

DisadvantagesUltimately interest rates are favoured significantly unfairly towards the profit of banks and lenders and grossly disadvantage the borrower.

Interest rates contributed to the current recession due to banks irresponsibly distributing high-risk loans on

under the premise of returns from interest.On a wider scale, it could be suggested that it is the general society - the smaller/medium sized businesses, the lower/middle income earners and the ordinary folk who are most greatly disadvantaged as they are repaying an ever an increasing amount of debt.

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What is the significance of interest Rates for an economy?

the significance is that the government profit from specific interest rates in an economy

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Interest Rates

What are the interest rates for Amerisave mortgages?

"Currently interest rates (as of 08/30/2011) for Amerisave mortgages range from 3.750 (3.923 APR) for a 30 year fixed to 1.875 (3.127 APR) for a 3-year ARM (Adjustable Rate Mortgage); rates for FHA loans are from 3.625 (4.365 APR) for a 30 year fixed rate loan to 3.000 (3.659) to a 15-year fixed loan. These are for convention loans in amounts up to $417,000. The rates change on a daily basis, but you can ""lock in"" a rate for a small fee when you apply."

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Interest Rates

If the daily interest rate is 3.50 percent what is the annual interest rate?

3.5% interest compounded daily is equivalent to 3.562% annual yield.

(It can't possibly be 3.5% daily. That would compound to 28,394,072% in a year.)

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Interest Rates

What is the rate of Risk-Free interest in Malaysia?

About 2.75%

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Interest Rates

What is the FHA mortgage Interest Rate?

FHA mortgage interest rate depends on many factors. There is no set rate. Banks send lenders and mortgage companies a rate sheet daily, which tells them how much they will pay for each rate. You can look at a rate sheet and see where the bank wants the rate to be by how much they will pay the originator. The point where the bank doesn't pay anything to the originator, is where the rate is too low for the bank. The rate can be bought up or down by the borrower paying points (a percentage of the total loan amount) to the originator, but those points are added to the formula show you what the effective or actual rate of your mortgage is. For example, if you get a loan at 5% apr for 30 years, but you pay 3 points or percentage points at origination, your actual rate is no longer 5% apr. You have to take into account all the funds you pay to the bank, the originator, the appraiser, the credit bureau etc. during the life of the loan (from application through pay off). In Florida, by law you will get a document at closing that shows you exactly what your effective rate is. Before closing, your originator should explain this to you and they must disclose any fees they will receive from the bank. The best advice is to deal with honest mortgage originators, do your homework and make sure that they are reputable and check with the State to make sure they have a clean history.

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Interest Rates

What is the significance of interest rate on an economy?

to make the economy more effective and efficient

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Interest Rates

What is interest rate?

The percentage of a sum of money charged for its use.

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Interest Rates

Where can you find the best interest saving rates?

You can only find the best interest saving rates through comparison. First, you find interest rates from different company, and see which one offers the best.

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Interest Rates

Interest rates for savings accounts in 2007?

3.5% per annum

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Interest Rates

What interest rate does chase freedom charge?

The rate charged by this card is 0% for the first six months, after that it is variable between 11.99 percent to 22.99 percent. I think that the rate also differs between purchases, cash advances and balance transfers.

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Interest Rates

How often do the highest CD rates change?

CD rates do not change. Interest on a CD is lost if you take an early withdrawal. A savings link allows for a certain amount of debits without losing interest.

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