Intressimäära

Intressimäära, often translated as interest rate, is the cost of borrowing money or the reward for lending money. It is typically expressed as a percentage of the principal amount over a specific period, usually a year. When you take out a loan, the interest rate determines how much extra you have to pay back to the lender in addition to the original amount borrowed. Conversely, when you deposit money into a savings account or invest in certain financial instruments, the interest rate represents the return you earn on your capital.

Central banks play a significant role in setting benchmark interest rates, which influence rates across the entire economy. These rates are a key tool of monetary policy, used to manage inflation and economic growth. For example, a central bank might lower interest rates to encourage borrowing and spending, stimulating economic activity. Conversely, raising interest rates can help curb inflation by making borrowing more expensive and saving more attractive.

Interest rates can vary greatly depending on factors such as the borrower's creditworthiness, the loan term, the type of loan or investment, and the prevailing economic conditions. Lenders assess risk, and higher perceived risk generally leads to higher interest rates. Different types of interest rates exist, including fixed rates, where the rate remains constant for the life of the loan, and variable rates, which can fluctuate over time based on market conditions. Understanding interest rates is crucial for personal finance decisions, business investments, and macroeconomic analysis.