What is a high interest rate?

A high interest rate is a percentage charged by a lender for the use of borrowed money. It represents the cost of borrowing and is typically expressed as an annual percentage rate (APR). A high interest rate can make borrowing more expensive and can also reduce the purchasing power of money saved in a bank account. The Federal Reserve sets interest rates for banks, which can affect interest rates for borrowers and savers. High interest rates can be caused by a variety of factors, including inflation, economic growth, and government monetary policy.

The effects of interest rates are often not directly felt but play out over a long time as valuations of real-estate and other assets adjust.

At Horizon65, we created a mobile app that enabled you to check the effect of high interest rates on your savings and to simulate potential investments that can defend against it.

Similar Questions

How to calculate flat interest rate?

To calculate a flat interest rate, use the following formula: Interest = Principal x Rate x Time. Principal is the initial amount ...

What is an interest rate swap?

An interest rate swap is a financial contract between two parties in which one party agrees to pay a fixed interest rate to the ot...

How to calculate apr from interest rate?

To calculate the Annual Percentage Rate (APR) from an interest rate, you can use the following formula: APR = (interest rate x 365...

Ready to get started?

Download our app and start gaining insight into your current and future finances.