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:
“Authoritarian political ideologies have a vested interest in promoting fear, a sense of the imminence of takeover by aliens—and real diseases are useful material.”
—Susan Sontag (b. 1933)
“If you could choose your parents,... we would rather have a mother who felt a sense of guilt—at any rate who felt responsible, and felt that if things went wrong it was probably her fault—we’d rather have that than a mother who immediately turned to an outside thing to explain everything, and said it was due to the thunderstorm last night or some quite outside phenomenon and didn’t take responsibility for anything.”
—D.W. Winnicott (20th century)