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#economics

Start rate

Start rate is the beginning interest rate of an adjustable-rate mortgage (ARM) loans, it is the interest rate for the first period, as the ARM rate will be adjusted in subsequent periods. The start rate is usually lower than current market rates, in order to help the applicant qualify for a larger loan amount.


3-2-1 and 2-1 buydowns are two common mortgage buydown structures. In a 3-2-1 buydown, the buyer obtains a lower interest rate for the first three years. In a 2-1 buydown, reduction is only available for the first two years.

Interest rate

An interest rate is the percentage of principal that is charged as interest for its use by the lender. An interest rate is typically defined as an annual percentage of the borrowed principal and is calculated by dividing the amount of interest by the amount of principal.


Interest Rate = Amount of Interest / Principal
Amount of Interest = Interest Rate x Principal


For example, if the interest rate is %5 for $100,000 loan
Amount of Interest = (5 / 100) x 100,000 = $5,000 for each year.

GDP

GDP is an acronym for "Gross Domestic Product" in economics. GDP refers the economic growth in a country.


Gross Domestic Product (GDP) is the total value of goods and services produced by a country in a year. Gross National Product (GNP) measures the total economic output of a country, including earnings from foreign investments.


The growth rate is calculated by comparing gross domestic product (GDP) in a year with the GDP in the previous year.


:: More Info ::
Countries' GDP rates in years

Economic growth

Economic growth refers the steady growth in the productive capacity of the economy, such as an increase in the number of goods and services over a period of time.


In a simpler manner, economic growth is how much more the economy produces than it did in the previous period. The growth rate is calculated by comparing gross domestic product (GDP) in a year with the GDP in the previous year.


Gross Domestic Product (GDP) is the total value of goods and services produced by a country in a year. Gross National Product (GNP) measures the total economic output of a country, including earnings from foreign investments.


:: More Info ::
Countries' GDP rates in years

demand

Demand is the consumer's need or desire to own the products or services.
An increase in automobile prices may lead to a decline in demand for gas.