Tips To Get Grips With Interest Rates –

Whether you are going to borrow money or going to invest your savings in any organization, the first thing you need to do is to have a clear idea about how much interest will be charged or paid to you. This is important and it is advisable to shop around to look for best deals that best suit you. Never opt for a deal where you have to pay a large sum of money in the form of interest rate or never invest in a company that offers a low rate of return on your money.

Getting to Grips with Interest Rates

Sometimes, it becomes inevitable to borrow money in order to meet your expenses. Borrowing can be of different types. Borrowings claims some interest rate to pay on the actual amount and you have to pay it back over a period of time with a specific amount of interest rate.

Interest is basically a lender's fee for loaning you money. Interest and borrowed money are in direct proportion to each other which means that the greater the amount borrowed, the larger will be the interest rate. Interest rate is charged at a certain percentage of the borrowed money and for those who are not familiar with the numbers basics are given in the following paragraphs. It is always important to understand these financial terms and their usage because they are vital tools in the world of finance.


If you want to make yourself familiar with the dealings of financial world, it is necessary to have a good knowledge about the percentages. Most of the people who do not belong to the business world often find it difficult to understand them. In fact, the process is not that difficult as it looks to people. What we mean by percent is 'per hundred', eg 1% or 1 percent means 'one per hundred'. Let's say we have £ 100 and 1 percent of this sum simply means one per hundred or to say £ 1. Similarly, 2 percent of this sum means £ 2 (two in each hundred).

Now let us take £ 200 and we have to work out 2 percent of it. As we have explained above that 2 percent means 2 in each hundred or 2/100 that means 2 / 100×200 = £ 4. So, 2 percent of £ 200 means £ 4. What you need to do is to remember this 'per hundred' rule and this can be same for finding the percentage of all the other numbers. From this description of finding percentage you will have come to know that the higher the percentage, the more money is involved.

By having a good knowledge about the percentage, you will be able to choose a best deal for you whether it is for borrowed money or for investing money. It is always important to choose the deal that best serve the purpose for you and for which you do not have to pay more than what is required.

Source by Tauqeer Ul Hassan

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