The principal times 1 plus and what was the interest rate?

Interest rate

Nominal interest rate

Market interest rate

Effective interest rate

That's the interest rate.

166 effective interest rate.

Because my original principal your original principal was 1, and now you're paying 1.25 in interest, so you're paying 125 annual rate.

I have lost both principal and interest.

You've paid all the principal and interest.

So it's still a 50 interest rate for the six months, but your principal has increased, right?

That's the annual interest rate.

It's the annualized interest rate.

This is monthly interest rate.

Gradually the interest rate will increase.

And what's my effective interest rate?

lot of interest, charging you a mid teens interest rate or 20 rate, this is 650 .

This is the interest rate you assume.

Let's say that the interest rate is 25 .

For bankers, we'd be living off the principal, not the interest.

He lends money at a high rate of interest.

All of a sudden we lowered the interest rate.

It exposes the Fed to less interest rate risk.

I'm going to charge the interest rate on that.

And they'll charge an interest rate for lending that cash.

The paid principal, that's going to be the mortgage payment minus your interest.

And over time, the interest component becomes less, and the principal becomes more.

My annual rate looks a lot more like 125 interest, right?

So essentially, a 30 year fixed rate loan has a 30 year principal amortization.

And that 200 is equal to 100 of principal, plus 100 of interest, because I paid 10 a year of interest.

Principal

So when I talk about the short term interest rate I'm talking about the interest rate on loans that are made over very short periods of time.

So this is essentially kind of an annual interest rate, but if

So the government has to pay a lower interest rate on it.

A lot of people, you know, when you hear 10 interest rate or even a 25 interest rate, that no one really makes a big deal about it.

In a traditional mortgage, you actually, your payment has some part interest and some part principal.

Vice principal.

The principal?

Well, when you lower the interest rate, the terms that are using that discount rate the most, benefit the most.

Corporate borrowing from financial institutions is rising due to the low interest rate.

Remember, this is the annual interest rate but this is an overnight loan.

The interest rate is essentially what percentage of the original amount you borrowed.

After six months, I want you to pay 1 principal plus 50 interest, plus 50 cents, right?

I don't care whether B's guy is better at getting a low interest rate.

And maybe it'll be another 5 or maybe the interest rate can change again.