Interest Rate

[Explain this!]

Is an interest rate known as a rate because it represents a percentage per year or per dollar, as in 6%/year or 6%/$1?

I think that 6% per year is correct because there is usually a year or fractional part of a year that is used with the percentage. $100.00 at a rate of 6% for 1 year or 6 months (1/2 year), etc.

6% per dollar would cancel the dollar unit from the amount being multiplied. Example $100.00 * 6% per $1 would need a dollar unit.

 

[Deleted member 4993]

Is an interest rate known as a rate because it represents a percentage per year or per dollar, as in 6%/year or 6%/$1?

I think that 6% per year is correct because there is usually a year or fractional part of a year that is used with the percentage. $100.00 at a rate of 6% for 1 year or 6 months (1/2 year), etc.

6% per dollar would cancel the dollar unit from the amount being multiplied. Example $100.00 * 6% per $1 would need a dollar unit.

Annual Interest rate 6% would mean:

6 units of money ( may be dollars or pesos or euros, etc.) earned as interest​

​

per 100 units (that is where % comes in) of money ( may be dollars or pesos or euros, etc.)​

​

per year (or other unit of time)​

 

[Explain this!]

Annual Interest rate 6% would mean:

6 units of money ( may be dollars or pesos or euros, etc.) earned as interest​

​

per 100 units (that is where % comes in) of money ( may be dollars or pesos or euros, etc.)​

​

per year (or other unit of time)​

I think that there are countless examples in which a percentage can be called a rate other than for interest. For example, if 30 students received passing grades for a particular class, that would be 1.8 students. I think this would be 6% per student. If I'm not mistaken, this would be a rate of 6% per student or 6%/student.

 

[lev888]

Is an interest rate known as a rate because it represents a percentage per year or per dollar, as in 6%/year or 6%/$1?

I think that 6% per year is correct because there is usually a year or fractional part of a year that is used with the percentage. $100.00 at a rate of 6% for 1 year or 6 months (1/2 year), etc.

6% per dollar would cancel the dollar unit from the amount being multiplied. Example $100.00 * 6% per $1 would need a dollar unit.

Rate (mathematics) - Wikipedia

en.m.wikipedia.org

 

[Deleted member 4993]

I think that there are countless examples in which a percentage can be called a rate other than for interest. For example, if 30 students received passing grades for a particular class, that would be 1.8 students. I think this would be 6% per student. If I'm not mistaken, this would be a rate of 6% per student or 6%/student.

The correct statement would be (neither of the two made above):

6% OF the (total) students

 

[Explain this!]

The correct statement would be (neither of the two made above):

6% OF the (total) students

If 6%/student is incorrect as seen in my last question, why is 6%/year correct for interest rates?

 

[lev888]

If 6%/student is incorrect as seen in my last question, why is 6%/year correct for interest rates?

Read the wiki article.
1. The % of students is dimensionless. We are dividing students by students, the result is just a ratio, no units.
2. Interest rate acquires 'per year' unit only when you specify that it applies every year. Sales tax is a rate, but since it's applied only once it doesn't have the 'per year' unit.

 

[Explain this!]

Read the wiki article.
1. The % of students is dimensionless. We are dividing students by students, the result is just a ratio, no units.
2. Interest rate acquires 'per year' unit only when you specify that it applies every year. Sales tax is a rate, but since it's applied only once it doesn't have the 'per year' unit.

I do not understand the following: "Sales tax is a rate, but since it's applied only once it doesn't have the 'per year' unit."
If interest rate applies for every year, why doesn't sales tax apply for every dollar?

 

[lev888]

I do not understand the following: "Sales tax is a rate, but since it's applied only once it doesn't have the 'per year' unit."
If interest rate applies for every year, why doesn't sales tax apply for every dollar?

Sales tax is the number of dollars you pay on each $100 of goods and services. E.g. $6 on each $100. What's rate? $6/$100 = 6/100 = 6%.

 

[Explain this!]

Sales tax is the number of dollars you pay on each $100 of goods and services. E.g. $6 on each $100. What's rate? $6/$100 = 6/100 = 6%.

So the sales tax rate is not 6%/100 dollars, but the rate of $6/$100, which equals 6%. It seems to be backwards. Interest rates are not expressed this way. 6%/year is not transformed to something else per year

This must be why the dollar units cancel properly: 0.06 dollars/1 dollar X 3 dollars will equal 0.18 dollars. I be honest. I'm still somewhat confused.

I read the Wikipedia information, but it did not help.