The usual way of calculating interest — as a percentage of the sum borrowed.
The company increasingly relied on Lenders Funding LLC, a firm that fronted cash at an interest rate of 35 percent.
In May, for example, IBM sold $1.2 billion in seven-year bond at an interest rate of just 1.625 percent.
In November 2011, the government raised $17.224 billion, selling 30-year bonds at a 3.125 percent interest rate.
And so this week, the U.S. government sold $20 billion of 28-day bills with an interest rate of zero.
Elizabeth Warren proposes to cut that interest rate to less than the rate of inflation.
What interest rate will be charged upon the loans that are to be made?
No considerable diminution of the interest-volume can be expected through a decline in the interest rate.
Real interest rates skyrocket because in an environment of negative inflation, even a zero interest rate is high in real terms.
A lender, as we know, must charge an interest rate that recovers the depreciated value of the dollars loaned.
Hence, we would have proved that a fall in the interest rate causes a rise in the interest rate—which is absurd.