- published: 22 May 2016
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An interest rate is the rate at which interest is paid by a borrower for the use of money that they borrow from a lender. For example, a small company borrows capital from a bank to buy new assets for their business, and in return the lender receives interest at a predetermined interest rate for deferring the use of funds and instead lending it to the borrower. Interest rates are normally expressed as a percentage of the principal for a period of one year.
Interest rates targets are also a vital tool of monetary policy and are taken into account when dealing with variables like investment, inflation, and unemployment.
In the past two centuries, interest rates have been variously set either by national governments or central banks. For example, the Federal Reserve federal funds rate in the United States has varied between about 0.25% to 19% from 1954 to 2008, while the Bank of England base rate varied between 0.5% and 15% from 1989 to 2009, and Germany experienced rates close to 90% in the 1920s down to about 2% in the 2000s. During an attempt to tackle spiraling hyperinflation in 2007, the Central Bank of Zimbabwe increased interest rates for borrowing to 800%.
Rates (Portuguese pronunciation: [ˈʁatɨʃ]) is a Portuguese parish and town located in the municipality of Póvoa de Varzim. In the census of 2001, it had a population of 2,539 inhabitants and a total area of 13.88 square kilometres.
Rates is a historic small town that developed around the Monastery of Rates, established by Henry of Burgundy in 1100 AD on the site of an older temple. It gained importance due to the legend of Saint Peter of Rates, first bishop of Braga, becoming in a central place in the Portuguese Way of Saint James.
It has been inhabited since the Roman era; archaeological works in its church date the site from the Roman era, and there was a Roman road running through it.
In the 16th century, the monastery was dissolved and a Comenda of the Order of Christ was created. Its first Comendador was the Noble Knight Tomé de Sousa, who John III of Portugal made Governor of Brazil. It lost its municipal status in 1836 and was annexed to Póvoa de Varzim. It became a town again on July 2, 1993, mostly due to its historical importance. This new status is merely honorary in nature and not of administrative importance.