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:
“Those people have no real interest in a science who only begin to get excited about it when they themselves have made discoveries in it.”
—Friedrich Nietzsche (1844–1900)
“At this very moment,... the most frightful horrors are taking place in every corner of the world. People are being crushed, slashed, disembowelled, mangled; their dead bodies rot and their eyes decay with the rest. Screams of pain and fear go pulsing through the air at the rate of eleven hundred feet per second. After travelling for three seconds they are perfectly inaudible. These are distressing facts; but do we enjoy life any the less because of them? Most certainly we do not.”
—Aldous Huxley (1894–1963)