rate of interest

Also found in: Dictionary, Thesaurus, Medical, Legal, Acronyms, Encyclopedia, Wikipedia.

Rate of interest

The rate, as a proportion of the principal, at which interest is computed.

Interest Rate

The percentage of the value of a balance or debt that one pays or is paid each time period. For example, if one holds a bond with a face value of $1,000 and a 3% interest rate payable each quarter, one receives $30 each quarter. The percentage of the interest rate remains constant (usually), but the amount one pays or is paid changes according to the amount of the balance or debt. For example, if one pays off part of the principal on a loan each month, the amount one pays in interest decreases even though the rate remains the same. See also: Time Value of Money.

rate of interest


rate of interest

References in periodicals archive ?
In the LW model, a falling trend rate of growth of potential output, coupled with other factors, contribute to the decline in the estimated natural rate of interest in both periods.
4] While changes in the expected real rate of interest are not directly observable, it may be possible to detect the repercussions of such a change, by observing the behavior of the relative price of short-lived to long-lived assets.
In the first instance, the model ties down a priori the long-run response of investment to a change in the real rate of interest: The capital stock and, consequently, long-run investment rise by 1 percent for a 1 percent decline in the cost of capital (based on an estimated elasticity of substitution equal to one); and the percentage decline in the cost of capital for a given percentage decline in the rate of interest varies inversely with the depreciation rate of capital.
The rate of interest to be charged or paid will depend on the rate of interest previously paid or charged.
In other words, the government should not undertake to view itself as a financial institution that is free to extract a high rate of interest from taxpayers with no negotiating power while paying a lesser rate.
Instead, the final 1990 tax bill took a different approach: increasing the rate of interest payable by C corporations on "large corporate underpayments.
Both series of bonds initially bear interest in the weekly rate mode, but may be converted to a daily, short-term, auction or long term rate of interest.
The COPs will be issued initially in the weekly rate mode, but may be converted to a flexible or fixed rate of interest.
These capital securities, which mature in 30 years, are set at a fixed rate of interest for five years at a pretax interest cost of 5.
In addition, CIT (i) rescinds and revokes its Notice of Default/Reservation of Rights letter dated September 2, 2004 effective as of February 1, 2005 and (ii) confirms that they will cease charging the default rate of interest of 2% over the bank rate of interest, as defined, on all obligations under the Agreement effective as of January 1, 2005.
The COPs will be issued initially in the weekly rate mode but may be converted to a flexible or fixed rate of interest.