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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 periodicals archive ?
In the West Midlands, the programme said the most dangerous road is the A53 Leek-Buxton which had a risk rate 118.
If the cost reduction arising from a deductible does not recover the offered community-rated premium rebate, it may be wise to allow the insurers to risk rate the premium rebate.