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Interest-Rate

17 May 2017Economics Essays

The term interest, is the ‘rent‘ paid to borrow money. The lenders recieves compensation for determinign his own consumption. The original amount rate is ‘principal’, and the percentage of the principal which is paid/payable over a period of time (usually one year) is the “interest rate”.

To the economics is the return or gain from the use of real capital such as road, bridges, tools, tractors, factories and equipment and thelike1.

In banking it is a money earned on a laon( for examplegive to a bank, or given by bank)according to a time-based rate result (wikipedia).

They have diffirent explanation or definition on this tern”interest-rate” because of their different function and interest freference. For the Bank, it focus on the money they lend to the company or people and the return of interest they gain. For the economist, for the return of money use inevested to property.

Movements in the Market-Rates

The popular site www.bondsonline.com , states that:

“The recent movement usually happen when the market order submitted by a trader , then it is transacted immediately at the OANDA FXTrade servers without further communication with trader. The exchange rate used for the trade will correspond to servers and not necessarily the rate dispalyed in the Buy/Sell Market Order window at the time the order was submitted. This is because the rate have changed between the time the order was submitted and the time the order is executed. Typically, the difference between the rate obtained or an order and the rate displayed in the Buy/sell Market Order window

when the order is submitted will be small (and often to the advantage of the trader). However, in times of market volatility, the difference can be larger--- in this case, the lower “bound” and the “upper bound” fields of the order can be used to limit the traders risk, as described .

Expert On Market Changes

Three financial expert like Ray Boulger ; Francis Klonowski and Anna Bowes says in the BBC news that , the changes rates are bad for mortgage holders and good for savers. However the lower rates are good news for mortgage holders but not savers.

The business point of view and analysis says, for the Bank, it change because of the effect of high energy prices, which is feeding through the economy to affect everything from transport cost to the price of utility bills.

Another cause is the he trouble in the Middle East pushing oil to over $70 per barrel. Expectations that the oil price rise would only be temporary are now being revised.

To Ordinary citizen, the rapid rise in rates could lead to a big increase in the cost of debt, causing widespread difficulties for individuals who are over-stretch.

In general, the Interest-Rate have different point of view on the part of investor depending on their line of interest. The countries have also different market-rates depending on their economy and savings. However, the business experts on changing rates have positive and negative points. Nevertheless, the most affective is the ordinary citizen and the small investor that borrow from the big capitalist. The market change up and down as human citizen we must save to balance the economic crisis.

Reference

Exchange rate. 2006.Oct . 4,2006,http://www.kitco.com/market/
Interest rate rising. 2006. Oct. 4,2006, http://money.cnn.com/2006/10/04/markets/markets_0530/index.htm?postversion=2006100418.

Interest Rate. 2006.Oct. 4,2006 https://en.wikipedia.org/wiki/Interest_%28disambiguation%29

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