Interest Rate


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Interest Rate

 

the rate of interest for loaning money, the ratio of the amount of income from a loan to the total loan.

In precapitalist formations, usurious credit was the basic form of credit, and if no special legislative restriction existed in a country, the interest rate had virtually no limit. Under capitalism, the interest rate fluctuates within the average profit rate, depending on the supply and demand for loan capital. Nowadays, it is also influenced by inflation processes, international flows of capital, the state-monopoly regulation of credit, and other factors. Under socialism, the interest rate is set by the state in a planned manner and is not subject to spontaneous fluctuations.

References in periodicals archive ?
With economists projecting several interest rate hikes through 2006, financial advisers say now is the time for borrowers to take a second look at the loan terms of adjustable-rate mortgages.
The option premium compensates the issuer for the risk that the bond's interest rate might increase at the remarketing date, reducing that risk.
Last week the Federal Reserve Board, taking a more aggressive stance against inflation, pushed up short-term interest rates by half a percentage point.
TEI believes the concept underlying the interest rate differential was seriously flawed when the provision was enacted and remains flawed today.
Rock-bottom interest rates have also allowed moribund firms to stay afloat, creating over-crowded markets, and encouraging inefficient and wasteful investment.
If you've been in your home for a while or have an extraordinarily low interest rate, it doesn't make sense to refinance your loan to get cash at the expense of adding years to your mortgage at a higher interest rate.
Home mortgage rates may cause a challenge as interest rates start moving back up.
Now let's complicate the problem a bit by varying the term of the loan as well as the interest rate.
For example, last week interest rates for a 30-year fixed mortgage in California averaged 8.
While the dramatic decline in interest rates was a welcome relief to most financial executives, the task of managing rate risk is never complete.