interest rate
Definition
Annual cost of credit or debt-capital computed as the percentage ratio of interest to the principal. Each bank can determine its own interest rate on loans but, in practice, local rates are about the same from bank to bank. In general, interest rates rise in times of inflation, greater demand for credit, tight money supply, or due to higher reserve requirements for banks. A rise in interest rates for any reason tends to dampen business activity (because credit becomes more expensive) and the stockmarket (because investors can get better returns from bank deposits or newly issued bonds than from buying shares).
interest rate is in the Accounting & Auditing, Banking, Commerce & Finance and Investing subjects.
interest rate appears in the definitions of the following terms:
last in, first out (LIFO),
capital intensive,
interest rate parity theory,
capital investment factors,
variable interest rate,
risk asset,
credit spread,
equity kicker,
synthetic lease,
disclosure
and
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