So: the interest rate of one cent is 1%.
1 cent interest usually means 1% per month, so borrowing 10,000 yuan, a month's interest is 10,000 * 1% = 100 yuan. If the 1 cent interest, converted to annual interest rate, 1% * 12 = 12%, equivalent to borrowing 12% annual interest rate. Annual interest rate of 12%, 10,000 yuan borrowed for 1 year, equal principal and interest repayment, the interest is 661.85 yuan. And equal principal repayment, the interest is $650.
As long as the annual interest rate on the loan is less than or equal to 24 percent, the lender's request for the borrower to pay interest is supported by the court.
The interest rate is the ratio of the amount of interest to the amount of money borrowed (principal) over a given period of time.
Interest rate is the main factor that determines the cost of capital of the enterprise, but also the determining factor of enterprise financing and investment, the study of the financial environment must pay attention to the current situation of interest rates and its trend.
Interest rate is the ratio of the amount of interest due in each period to the face value of the amount borrowed, deposited or lent (called the total principal). The total interest on the amount lent or borrowed depends on the total principal amount, the interest rate, the frequency of compounding, and the length of time for which it is lent, deposited, or borrowed. The interest rate is the price the borrower pays for the money he borrows and the return the lender gets for delaying his spending and lending to the borrower. The interest rate is usually calculated as a percentage of the principal over a one-year period.
In general, interest rates are expressed in terms of annual, monthly, and daily rates, depending on the standard of the term of measurement.
In the modern economy, the interest rate as the price of money, not only by the economic society in many factors of constraints, but also, changes in the interest rate of the whole economy has a significant impact, therefore, the modern economists in the study of interest rate decision, pay special attention to the relationship between the various variables as well as the whole economy of the equilibrium problem, the theory of interest rate decision has also experienced the classical interest rate theory, Keynesian interest rate theory, Loanable funds interest rate theory, IS-LM interest rate analysis and contemporary dynamic interest rate model evolution, development process.
Keynes believed that savings and investment are two interdependent variables rather than two independent variables. Keynes viewed the interest rate as an exogenous variable with no interest rate elasticity in his theory where the money supply is controlled by the central bank. The demand for money then depends on people's psychological "liquidity preference".
The theory of the interest rate on loanable funds is a neoclassical theory of interest rates, which was proposed to amend Keynes's "liquidity preference" theory of interest rates. In a way, the loanable funds interest rate theory can actually be seen as a synthesis of classical interest rate theory and Keynesian theory.
The famous British economist Hicks and others think that the above theory does not take into account the factor of income, and therefore can not determine the level of interest rates, so in 1937 proposed a general equilibrium theory based on the IS-LM model. Thus, a theory of simultaneous determination of interest rate and income under the interaction of four factors, namely, savings and investment, money supply and money demand, was established.
According to this model, the determination of the interest rate depends on the four factors of savings supply, investment needs, money supply, and money demand, and the factors that lead to changes in savings and investment, and money supply and demand will all affect the level of the interest rate. This theory is characterized by general equilibrium analysis.