Loan Amortization

An interest rate is a promissed rate of return, and there are many different interest rates as there are many different ways of lending or borrowing money.

Mortgage rate is the interest rate that home buyer pays on the loan when he/she takes to finance his/her home.
Commercial Loan rate is the rate charge by the bankson loans made to businesses.

The interest rate on any type of loan depends on a number of factors, but the three ost important ones are unit of account, its maturity, and its default risk.
The unit of account is the medium in which payments are denominated.
The maturity of a fixed-income instrument is the length of time until repayment of the entire amount borrowed.
Default risk is the possibility that some portion of the interest or the principal on a fixed-income instrument will not be repaid in full.