Author: Tamas Blummer 2019-06-28 08:27:16
Published on: 2019-06-28T08:27:16+00:00
BTC) in exchange for paying back 1.2 BTC after one year would mean an interest rate of 20%.Loans are a common financial instrument and are widely used by individuals, businesses, and governments to finance various activities. In finance, loans are formalized as zero bonds, which are contracts between two parties where one party receives an amount less than the principal amount and has to pay back the principal amount at a later time point called maturity. The difference between the amount received and the principal amount is the interest implied by the contract.For instance, if Alice receives 1 BTC in exchange for paying back 1.2 BTC after one year, the interest rate implied by the contract would be 20%. Loans can have different maturities and interest rates depending on the terms of the contract.
Updated on: 2023-06-13T19:47:13.735144+00:00