Interest Rates

Interest rates can refer either to the cost of borrowing money or the return earned on an investment, usually expressed as a percentage of the principal. They play a vital role in the world of finance, influencing everything from loans to savings accounts.

What Are Interest Rates?

Interest rates are essentially the cost of borrowing money or the return on investment for lending money. When you borrow money, such as taking a loan or using a credit card, you usually have to pay back more than you borrowed. This extra amount is the interest, and it's a percentage of the original sum.

Types of Interest Rates

There are two main types of interest rates: