Question

How is interest rate determined ?​

Answer 1

ᴛʜᴇ ɪɴᴛᴇʀᴇsᴛ ʀᴀᴛᴇ ᴄʜᴀʀɢᴇᴅ ʙʏ ʙᴀɴᴋs ɪs ᴅᴇᴛᴇʀᴍɪɴᴇᴅ ʙʏ ᴀ ɴᴜᴍʙᴇʀ ᴏғ ғᴀᴄᴛᴏʀs, sᴜᴄʜ ᴀs ᴛʜᴇ sᴛᴀᴛᴇ ᴏғ ᴛʜᴇ ᴇᴄᴏɴᴏᴍʏ. ᴀ ᴄᴏᴜɴᴛʀʏ's ᴄᴇɴᴛʀᴀʟ ʙᴀɴᴋ sᴇᴛs ᴛʜᴇ ɪɴᴛᴇʀᴇsᴛ ʀᴀᴛᴇ, ᴡʜɪᴄʜ ᴇᴀᴄʜ ʙᴀɴᴋ ᴜsᴇ ᴛᴏ ᴅᴇᴛᴇʀᴍɪɴᴇ ᴛʜᴇ ᴀᴘʀ ʀᴀɴɢᴇ ᴛʜᴇʏ ᴏғғᴇʀ. ᴡʜᴇɴ ᴛʜᴇ ᴄᴇɴᴛʀᴀʟ ʙᴀɴᴋ sᴇᴛs ɪɴᴛᴇʀᴇsᴛ ʀᴀᴛᴇs ᴀᴛ ᴀ ʜɪɢʜ ʟᴇᴠᴇʟ, ᴛʜᴇ ᴄᴏsᴛ ᴏғ ᴅᴇʙᴛ ʀɪsᴇs

Answer 2

Explanation:

The interest rate charged by banks is determined by a number of factors, such as the state of the economy. A country's central bank sets the interest rate, which each bank use to determine the APR range they offer. When the central bank sets interest rates at a high level, the cost of debt rises.

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