Protsendimäära

Protsendimäära refers to the percentage at which interest is calculated on a loan or deposit. It is a key factor in determining the cost of borrowing or the return on savings. The higher the protsendimäära, the more interest will be paid or earned. This rate is typically expressed annually, but it can also be applied over shorter periods such as monthly or quarterly.

When borrowing money, the protsendimäära represents the cost of that money. For example, if you take out a loan with a 5% protsendimäära, you will pay an additional 5% of the principal amount in interest over the course of a year. Conversely, for savings accounts or investments, the protsendimäära indicates the rate of return. A 3% protsendimäära on a savings account means your initial deposit will grow by 3% annually, excluding any fees or taxes.

The protsendimäära can be fixed or variable. A fixed protsendimäära remains the same for the entire duration of the loan or deposit, providing predictability. A variable protsendimäära, on the other hand, can fluctuate over time, often based on a benchmark interest rate. This means the amount of interest paid or earned can change. Central banks play a significant role in influencing protsendimäära rates through their monetary policy decisions.