Interest Rates

Interest Rates are a critical factor in both personal and business finance, influencing borrowing costs, investment returns, and overall economic activity. An interest rate is the percentage charged by a lender to a borrower for the use of money, typically expressed annually. For businesses, interest rates directly impact decisions around financing, capital investment, and operational costs. Higher interest rates often lead to more expensive borrowing, which can slow down expansion and investment, while lower rates make financing more affordable and can stimulate growth. Central banks, like the Federal Reserve in the U.S., adjust interest rates to control inflation and manage economic growth. Understanding interest rate trends and their impact on cash flow, loans, and savings is crucial for both businesses and consumers to make informed financial decisions.