No, the vehicle dealer will generally charge the vehicle buyer a higher interest rate to make a profit from the "spread." If Andrew is offered an interest rate (apr) of 7.2 percent from the vehicle dealer where he is buying a vehicle.
The amount that a lender costs a borrower in terms of interest is expressed as a percentage of the principal, or the lent amount. The annual interest rate, or APR, is the usual unit used to express the interest rate on a loan (APR).
The amount earned from a savings account or certificate of deposit at a bank or credit union may also be subject to interest rates (CD). Interest on these bank accounts is calculated as an annual percentage yield (APY).
Essentially, interest rates is a fee that the borrower must pay for using a resource. Cash, merchandise, automobiles, and real estate are all examples of lent assets. A higher interest rate makes borrowing the same amount of money more expensive; as a result, an interest rate can be viewed as the "cost of money."
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