interest-rate

Vocabulary Word

Definition

The 'interest rate' is the amount the bank charges you when you borrow money from them. It can also be the extra money you get when you save or invest with the bank.

Examples in Different Contexts

In banking, 'interest rate' determines the cost of loans and the return on savings. A bank teller might explain, 'Our savings account offers a 2% annual interest rate, compounded monthly.'

Practice Scenarios

Tech

Scenario:

Let's consider introducing a lending feature in our app. Users can borrow small amounts for short durations.

Response:

That sounds like a useful feature! We'll also need to think about how we set the interest rates for these short-term loans.

Business

Scenario:

We must ensure the company maintains liquidity without relying solely on credit lines with mounting costs.

Response:

I agree. High interest rates could make our credit lines expensive. We should look for other funding options.