1. Interest rate refers to the ratio of interest amount to borrowed funds (principal) in a certain period. Interest rate is the main factor that determines the capital cost of enterprises, and it is also the decisive factor for enterprises to raise funds and invest. To study the financial environment, we must pay attention to the current situation and changing trend of interest rates.
2. Interest rate refers to the ratio of the interest amount due in each period to the par value of the borrowed, deposited or borrowed amount (called the total principal). The total interest of the lent or borrowed amount depends on the total principal, interest rate, compound interest frequency and the length of time of lending, deposit or borrowing. Interest rate is the price that the borrower needs to pay for the money borrowed, and it is also the return that the lender gets by delaying his own consumption and lending it to the borrower. The interest rate is usually calculated by the percentage of one-year interest to the principal.
3. In terms of expression, interest rate refers to the ratio of interest amount to total loan capital in a certain period. Interest rate is the interest level of unit currency in unit time, indicating the amount of interest. Economists have been trying to find a set of theories that can fully explain the structure and changes of interest rates. Interest rates are usually controlled by the national central bank and managed by the US Federal Reserve. So far, all countries regard interest rate as one of the important tools of macro-control.
When the economy is overheated and inflation rises, it will raise interest rates and tighten credit; When the economy is overheated and inflation is controlled, interest rates will be lowered appropriately. Therefore, interest rate is one of the important basic economic factors. Interest rate is an important financial variable in economics, and almost all financial phenomena and financial assets are related to interest rate to some extent.
At present, countries all over the world frequently use interest rate leverage to implement macro-control, and interest rate policy has become the main means for central banks to adjust the supply and demand of money and then regulate the economy. Interest rate policy plays an increasingly important role in the monetary policy of the central bank.
4. Interest rate is an important tool to adjust monetary policy, and it is also used to control, for example, investment, inflation and unemployment rate, thus affecting economic growth. Reasonable interest rate is of great significance to social credit and economic leverage of interest rate.
During the depression, lower interest rates, expand money supply and stimulate economic development. In the period of inflation, we should raise interest rates, reduce the money supply and curb the vicious development of the economy. So the interest rate has a great influence on our life.