| interest rate | The price of credit, or ratio of the fees charged to secure credit from a lender to the amount borrowed, usually expressed on an annual percentage basis.
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| basis point | A measure of rate of return equal to one one-hundredth of a percentage point.
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| perpetuity rate | Rate of return on a financial instrument that is perpetual (never matures).
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| coupon rate | The promised interest rate on a bond or note consisting of the ratio of the annual interest income promised by the security issuer to the security's face (par) value.
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| current yield | The ratio of a security's promised or expected annual income to its current market price.
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| yield to maturity | The interest rate on a debt security that equates the purchase price of the security to the present value of all its expected annual net cash inflows (income) from now until its maturity date.
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| holding-period yield (HPY) | The rate of return received or expected from a financial asset or other investment over the period the asset or investment was held, including the price for which the asset or investment was sold to another investor.
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| present value | Funds received today are worth more than an equal nominal amount of funds promised in the future.
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| bank discount rate (DR) | Rate of return measure used in the money market which is based on the par value of a financial instrument and assumes a 360-day year.
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| simple interest method | A method of figuring the interest on a loan that charges interest only for the period of time the borrower actually has use of the borrowed funds.
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| add-on rate | A method for calculating the interest charge on a loan when the interest bill is added to the principal amount of the loan. That sum is divided by the number of installment payments required to determine the amount of each payment needed to eventually pay off the loan.
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| discount loan method | A method for calculating the interest rate on a loan that deducts the interest cost up front from the face amount of the loan with the borrower receiving only the net amount remaining for his or her use.
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| home mortgage interest rate | The percentage cost of borrowed funds used to purchase a house or other residential dwelling.
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| annual percentage rate (APR) | The actuarially determined rate on a consumer loan that Truth-in-Lending law requires lenders to communicate to borrowers.
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| compound interest | The payment of additional interest earnings on previously earned interest income.
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| annual percentage yield (APY) | The annualized rate of return on a savings account that U.S. depository institutions must report to their customers.
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