[This is part of the series: The Complete Guide To Economics 101.]

What are Interest Rates?

Interest Rates are the amount of money paid, or received, in a given period for owners of a given financial asset.

For example, a company may borrow capital from a bank and then owe a certain rate of interest for that use.

Or, a bond owner would have the rights to a certain rate of interest as payment for owning a bond.

Interest rates payments are typically expressed as a percent of the total principal.

[This is part of the series: The Complete Guide To Economics 101.]

What are Financial Assets?

Financial Assets are assets like cash, stocks, and bonds that give the owner a contractual claim on a financial liability.

For example:

Stock ownership gives the owner ownership rights in a company.

Bond ownership gives the owner rights to future payments.