Finance pp 172-179 | Cite as

Interest Rates

  • J. E. Ingersoll
Part of the The New Palgrave book series (NPA)

Abstract

Interest is payment for use of funds over a period of time, and the amount of interest paid per unit of time as a fraction of the balance is called the interest rate. In some contexts, economists have found it conceptually useful to refer to a single number, the interest rate. In fact, at any point in time there are many prevailing interest rates. The rate actually charged will depend on such factors as the maturity of the loan, the credit-worthiness of the borrower, the amount of collateral, tax treatment of interest payments for both parties and special features such as call provisions or sinking fund requirements.

Keywords

Volatility 

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Copyright information

© Palgrave Macmillan, a division of Macmillan Publishers Limited 1989

Authors and Affiliations

  • J. E. Ingersoll

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