interest rate

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Fiscal vs Monetary Policy

Fiscal vs Monetary Policy Explanation H1 What is Fiscal Policy? H2 Fiscal policy is essentially how the government decides to collect and spend money to impact the economy. This is studied in Macroeconomics to better understand the relationship between the economy and governmental influence. The study of fiscal policy is useful in speculating the reaction

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Rule of 72 Definition

What is Rule of 72 Definition? The rule of 72 definition is an approximation tool used to determine the amount of time it will take for money to double on the earnings of compound interest. The Rule of 72 is also used to calculate the rate of return necessary to double an investment in a

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What is Compound Interest?

See Also: Effective Rate of Interest Calculation When is Interest Rate Not as Important in Selecting a Loan? Interest Expense Nominal Interest Rate Interest Rate Swaps What is Compound Interest? Compound interest is interest earned on the principal plus interest earned on prior interest. Compounding interest rates not only earn interest on the original money,

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Interest Rate in Selecting a Loan

See Also: What is Compound Interest Effective Rate of Interest Calculation Interest Expense Nominal Interest Rate Interest Rate Swaps Why is the interest rate in selecting a loan not the best indicator? First off, the interest rate is always important. It determines the size of your loan payments. There are, however, other considerations which may

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Treasury Inflation Protected Securities

Treasury Inflation Protected Securities or TIPS for short are debt instruments that are issued by the U.S. government. TIPS are indexed with the Consumer Price Index (CPI), and adjust accordingly to the inflation rate presented in the CPI. Treasury Inflation-Protected Securities (TIPS) Explained Treasury TIPS means that the security will adjust for inflation or deflation

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Subordinated Debt

See Also: Mezzanine Debt Financing (Mezzanine Loans) Collateralized Debt Obligations Outstanding Debt Self-Liquidating Loans Loan Term What Your Banker Wants You to Know Alternative Forms of Financing Subordinated Debt Definition Subordinated debt is a security which has a residual claim upon a company’s assets, after the senior debt holders have had their claims satisfied. Meaning

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See Also: Economic Indicators Balance of Payments Supply and Demand Elasticity The Feds Beige Book What are the Twin Deficits? Stagflation Definition In economics, stagflation refers to the combination of stagnation and inflation. Stagnation refers to slowing economic growth or recession. It is a period of low gross domestic product and high unemployment. Inflation refers

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Prime Lending Rate

See Also: Interest Expense Interest Rate Swaps LIBOR Federal Funds Rate Market Rate Prime Lending Rate Definition Prime rate, or prime lending rate, is the interest rate commercial banks charge on loans to preferred borrowers. The prime interest rate is lower than the interest rates charged to less creditworthy borrowers. Commercial banks can charge lower

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Par Value of Bonds

Par Value of Bonds Definition The par value of bonds definition refers to the principal – the amount of money the bondholder receives when the bond matures. Par value is also called face value or nominal value. It is the amount stipulated in the bond contract. However, par value does not include interest payments. Bond

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See Also: Current Assets External Sources of Cash Fixed Assets Cash is in Your Business Track Money In and Out of a Company Monetize Definition Monetizing is the act of converting an item into cash usually a bank note or some other certificate that is readily convertible at a bank into cash. However, there are

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Mezzanine Debt Financing (Mezzanine Loans)

See Also: Recapitalizing Your Company Using Mezzanine Financing Angel Investor Venture Capitalist Why Venture Capital What is a Term Sheet What is Mezzanine Debt Financing (Mezzanine Loans)? Mezzanine debt financing is a subordinated and unsecured loan which typically features a warrant. This type of debt has higher interest rates because of its subordinated and unsecured

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Nominal Interest Rate Definition

See Also: What is Compound Interest Effective Rate of Interest Calculation Interest Expense When is Interest Rate Not as Important in Selecting a Loan? Interest Rate Swaps The Nominal Interest Rate Definition A nominal interest rate is the interest rate rate quoted on lending and borrowing transactions. Nominal rates represent the rate of exchange between

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