Definition

1. Noun:
   • The percentage of a sum of money charged for its use: The rate of interest is the cost of borrowing money or the reward for saving money, expressed as a percentage of the principal amount over a specific period, usually one year.

Usage

• The is a key concept in finance and economics. It is used when discussing loans, savings accounts, bonds, and central bank policies. It determines how much extra money a borrower must pay back or a saver/investor will earn.
• It is often simply called the "interest rate." The term is slightly more formal but is used interchangeably with "interest rate" in many contexts.

Examples

• Noun:
  • The bank offers a savings account with a 2% annual rate of interest.
  • Before taking out a mortgage, it is crucial to compare the rate of interest offered by different lenders.
  • The central bank raised the key policy rate of interest to combat inflation.

Advanced Usage

• "to be at a rate of interest": to have a specified interest cost or yield.
  • The loan was issued at a fixed rate of interest of 5%.
• "rate of interest charged/paid/applied": specifies the action related to the interest.
  • The rate of interest charged on overdue invoices is very high.

Variants and Related Words

• Interest rate (n): The most common synonym for .
  • Mortgage interest rates have been rising.
• Annual Percentage Rate (APR) (n): A broader measure that includes the plus other loan costs, expressed as a yearly rate.
• Yield (n): The effective earned on an investment, often used for bonds.

Synonyms

• Interest rate: The cost of borrowing or the gain from lending capital.
• Finance charge rate: Emphasizes the cost aspect of borrowing.

Related Phrases

• Prime rate of interest: The that commercial banks charge their most creditworthy customers.
  • Small business loans are often priced at the prime rate of interest plus a margin.
• Real rate of interest: The adjusted for inflation, showing the true cost of borrowing or yield on savings.
  • With high inflation, the real rate of interest on that bond is negative.

Noun

1. the percentage of a sum of money charged for its use