Suppose your uncle shows you $100 today or $150 in 10 years. you would prefer to take the $100 today if the interest rate is 5 percent.
An interest rate is the quantity of interest due per period, as a proportion of the amount lent, deposited, or borrowed
The total interest on a quantity lent or borrowed counts on the principal sum, the interest rate, the compounding frequency, and the length of the period over which it is lent, deposited or borrowed.
Market participants think the Fed rate hike cycle will peak in December in a capacity of 3.5-3.75%, followed by rate cuts early next year. This is consistent with anticipations of a recession.
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