Interest Rates
Interest rates represent the cost of borrowing money or the return on invested funds, typically expressed as a percentage of the principal amount over a period of time. They are a fundamental economic concept used in finance, banking, and investment to influence monetary policy, assess risk, and determine the value of financial instruments. In software development, interest rates are often modeled in applications for financial analysis, loan calculations, and economic simulations.
Developers should learn about interest rates when building financial technology (fintech) applications, such as banking systems, investment platforms, or loan calculators, to ensure accurate computations and compliance with financial regulations. Understanding interest rates is crucial for implementing features like compound interest calculations, amortization schedules, and risk assessment models in software that handles mortgages, savings accounts, or bonds.