Interest rate
Interest shown as a percent of the amount borrowed or saved, usually per year.
In the news
How “interest rate” came up in recent issues.
- Oct 26Oil jumps and stocks slide: what it means for gas money
“This week, the Fed announces its interest rate decision on Wednesday, and the government's first estimate of third-quarter economic growth is due Thursday at 8:30am ET.”
- Oct 20Oil is above $100 a barrel. Here's what that means at the pump.
“The yield is the interest rate the government pays you for it.”
Practice it
- Worksheet: Compound interest and the rule of 72Watch interest earn interest, and estimate how fast money doubles.
- Worksheet: Interest rates and the FedWhy the Federal Reserve raises and lowers interest rates, and why bond prices move the other way. Fits AP Macro Unit 4, the financial sector.
- Worksheet: Inflation and buying powerWhy the same dollar buys less over time, and what that means for your savings.
Learn the bigger idea
- Inflation, explainedWhy the same $20 buys less than it used to, and what that means for your paycheck and savings.
- Interest rates and the Fed, explainedThe price of borrowing money, who sets it, and why a change in Washington shows up in your car loan and savings account.
- Investing, explainedHow money grows on its own over time, why starting at 16 beats starting at 36, and the simple tools most people use.
- Banking and saving, explainedWhere to keep your money, how to avoid fees, and how to make it earn a little while it sits.
Related words
- Inflation
- When prices rise across the economy, so each dollar buys a little less.
- Purchasing power
- How much a dollar can buy. Inflation lowers it.
- Federal Reserve
- The U.S. central bank, often called the Fed. It raises or lowers a key interest rate to keep prices stable and jobs plentiful.
- Yield
- The yearly return an investment pays, shown as a percent. For bonds, yields go up when prices go down.
- Treasury
- A loan you make to the U.S. government. Treasuries are considered one of the safest investments.
- Bond
- A loan you make to a government or company. It pays you interest and returns your money on a set date.
Test yourself in Word sprint · All money words
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