Interest Rate Model

An interest rate model is a financial tool used to predict how interest rates might change over time. It helps lenders, investors, and companies plan by estimating future rates based on current market data and economic factors. These models consider various influences like inflation, economic growth, and monetary policy to provide a structured way to understand and manage interest rate risks. Essentially, it’s a way to forecast and analyze potential future costs of borrowing or returns on investments, aiding smarter financial decision-making.