Explain this!
Junior Member
- Joined
- Feb 7, 2019
- Messages
- 164
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.
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.