Interest Rate Notations
What is commonly referred to as the interest rate in the media is generally the rate offered on overnight deposits by the Central Bank or other authority, annualized.
The total interest on an investment depends on the timescale the interest is calculated on, because interest paid may be compounded.
In finance, the effective interest rate is often derived from the yield, a composite measure which takes into account all payments of interest and capital from the investment.
In retail finance, the annual percentage rate and effective annual rate concepts have been introduced to help consumers easily compare different products with different payment structures.
Read more about this topic: Interest Rate, Market Interest Rates
Famous quotes containing the words interest and/or rate:
“It is the interest one takes in books that makes a library. And if a library have interest it is; if not, it isn’t.”
—Carolyn Wells (1862–1942)
“If I die prematurely at any rate I shall be saved from being bored to death at my own success.”
—Samuel Butler (1835–1902)