Interest Rate = Money
"Through the 70s boomers saw and felt the ravages of inflation,
as interest rates skyrocketed and the rising cost of living
left them looking twice at their checkbooks. They felt that
Chicken Little pessimism might now be warranted: The sky
seemed indeed to be falling."
- Kay R. Shirley, author of
The Baby Boomer Financial Wake-Up Call
An interest rate is the spread between a specific monetary
transaction and the amount of money it costs you to make the
transaction. For example:
- If you borrow money, the interest rate is the amount of
money charged above and beyond the amount you actually borrowed
that you have to pay back to the lender.
- If you invest money, the interest rate is how much more
you earn above and beyond what you initially invested.
|
