Interest Rate

Interest rate is the cost of borrowing money or the reward for saving it, usually expressed as a percentage. When you take out a loan, the interest rate determines how much extra you’ll pay back in addition to the original amount borrowed. Conversely, when you deposit money in a bank, the interest rate signifies how much the bank will pay you for letting them use your funds. Higher rates typically indicate higher costs for borrowers and better returns for savers. Interest rates are influenced by various factors, including economic conditions and central bank policies.