Question

What is an interest rate? What are the components of interest rate?

Answer 1

Dear☺️✌️

One of the interest rate components is the real interest rate, which is the compensation, over and above inflation, that a lender demands to lend his money.

Answer 2

An interest rate is defined as the proportion of an amount loaned which a lender charges as interest to the borrower, normally expressed as an annual percentage. It is the rate a bank or other lender charges to borrow its money, or the rate a bank pays its savers for keeping money in an account. Explanation:

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