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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.


See Interest Rate.

References in classic literature ?
If, then, we knew the rate at which the sea commonly wears away a line of cliff of any given height, we could measure the time requisite to have denuded the Weald.
I believe we are continually taking a most erroneous view, when we tacitly admit to ourselves that sediment is being deposited over nearly the whole bed of the sea, at a rate sufficiently quick to embed and preserve fossil remains.
In this latter case, as long as the rate of subsidence and supply of sediment nearly balance each other, the sea will remain shallow and favourable for life, and thus a fossiliferous formation thick enough, when upraised, to resist any amount of degradation, may be formed.
Most people fancied that a telephone system was practically the same as a gas or electric light system, which can often be duplicated with the result of cheaper rates and better service.
The rates are alike, whether a city has one or two systems.
But it did not fulfil its promises of cheap rates, better service, and high dividends; it did little or nothing to improve telephonic apparatus, producing nothing new except the automatic switchboard--a brilliant invention, which is now in its experimental period.
It is true, three Chinese were killed by the tubes dropping on their heads from so enormous a height; but what were three Chinese against an excess birth rate of twenty millions?
Their present distance from the cliffs from which they were derived is about 420,000 feet, and if we assume that they traveled at the rate of 400 feet per annum, their journey must have occupied them no less than 1,055 years
During one of these visits he completed his estimates of the rate of movement of the glacier which had swallowed up the three guides, and uttered the prediction that the glacier would deliver up its dead at the foot of the mountain thirty-five years from the time of the accident, or possibly forty.
Rags and scraps of the coarse clothing were parted with at the rate equal to about twenty dollars a yard; a piece of a lantern and one or two other trifles brought nearly their weight in gold; and an Englishman offered a pound sterling for a single breeches-button.
So now my lord and lady duke and duchess, here is your governor Sancho Panza, who in the bare ten days he has held the government has come by the knowledge that he would not give anything to be governor, not to say of an island, but of the whole world; and that point being settled, kissing your worships' feet, and imitating the game of the boys when they say, 'leap thou, and give me one,' I take a leap out of the government and pass into the service of my master Don Quixote; for after all, though in it I eat my bread in fear and trembling, at any rate I take my fill; and for my part, so long as I'm full, it's all alike to me whether it's with carrots or with partridges.
The news is better for those who opted for a traditional 30-year fixed rate loan, especially if they took the plunge this spring.