Interest Rate

Definition

An Interest Rate is an amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets

Details

Interest rates are typically noted on an annual basis, known as the annual percentage rate (APR). The assets borrowed could include cash, consumer goods, and large assets such as a vehicle or building. The rate is derived by dividing the amount of interest by the amount of principal borrowed. Interest rates are quoted on bills, notes, bonds, credit cards, and many kinds of consumer and business loans.

Variations

None

Issues and Challenges

None

See Also

• Barron's Dictionary of Finance and Investment Terms, Ninth Edition, 2014.

Disclaimer

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• Definitions, detailed descriptions and other content may change at any time as further examples or relevant aspects are introduced
• This entry annotates a FIBO Ontology Class. FIBO is a trademark and the FIBO Ontology is copyright of the EDM Council, released under the MIT Open Source License. There is no guarantee that the content of this page will remain aligned with or correctly interprets the concepts covered by the FIBO ontology.