fundamentals
interest rate
The percentage charged on a loan or paid on savings, expressed as an annual percentage of the principal.
Example
"The Federal Reserve raised the interest rate to slow inflation."
💡 Memory Tip
The interest rate is what the lender's INTEREST earns — their reward for lending.
Etymology
Interest (from Latin 'interesse' meaning 'to be between') + rate — the charge between lending and borrowing.
Common Misspellings
intrest rateinterest reteinterest rteinterset rate
Related Terms
See Also
APR