Rate than a year mortgage of the same type. Likewise interestbearing investments such as bank certificates of deposit typically carry lower interest rates if the terms are shorter. If you decide to keep the money in the account longer you will be paid a higher interest rate. Interest rates themselves can be categoriz into simple or compound interest fix or variable. Come on lets discuss what the differences are Simple vs. Interest Compound Interest. Simple interest is charg only on the principal amount borrow.
For example if Party
A lends IDR dollars to Party B at a Namibia WhatsApp Number List simple annual interest rate of then Party B will receive interest payments of IDR of IDR for each year. Instead compound interest is paid on the principal amount and accru interest. For example using the scenario above Party A will receive IDR of IDR million after the first year but after the second year they will receive IDR of IDR million and after the third year they will receive IDR of IDR and so on. Fix vs Fix Interest Rate Variable Interest Rates Fix interest rates will not change over time. If you have money invest in a certificate of deposit it likely pays you a fix interest rate.
The opposite is the variable
Rate which is an interest Turkey Phone Number List rate that changes depending on how much the benchmark interest rate increases or decreases on the open market. Variable interest rate loans recalculate the interest paid or charg periodically Variable rate loans such as certain mortgages can be dangerous because borrowers can start paying low interest rates. rates rise in general they may have to start paying higher interest rates thereby increasing the total loan amount ow. Also read The Effect of Cutting Interest Rates on Business Conclusion.