Melissa offers you $1,000 today or $1,500 in 5 years. you would prefer to take the $1,500 in 5 years if the interest rate is: 8%.
interest rate is the amount of interest payable each period, corresponding to the amount lent, deposited, or borrowed. The total amount of interest on a loan or borrowed amount depends on the principal amount, the interest rate, the frequency of compounding, and the length of time it is loaned deposited or borrowed.
interest rate is the amount the lender charges the borrower and is a percentage of the principal, i.e. the amount lent. The interest rate on a loan is usually recorded on an annual basis called the annual percentage rate (APR).
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