If the current rate of interest is 5% then the future value that pays 1000 per year and lasts 18 years is closest to $16879.
An interest rate indicates how expensive borrowing is or how lucrative saving is. Therefore, if you are a borrower, the interest rate is the sum you pay for borrowing money and is expressed as a percentage of the overall loan amount. The US Real Interest Rate is at -0.87%, down from 2.31% last year. This is less than the historical average of 3.70 percent.
The Federal Reserve increased its target range for the federal funds rate by 75 basis points to 3.75%-4% during its meeting in November 2022. This was the sixth straight rate hike and the fourth in a row to be three-quarters of a point higher, driving borrowing costs to their highest level since 2008.
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