Editing Present value (section)

==Interest rates==
Interest is the additional amount of money gained between the beginning and the end of a time period. Interest represents the [[time value of money]], and can be thought of as rent that is required of a borrower in order to use money from a lender.<ref name=Broverman/><ref name=Ross/> For example, when an individual takes out a bank loan, the individual is charged interest. Alternatively, when an individual deposits money into a bank, the money earns interest. In this case, the bank is the borrower of the funds and is responsible for crediting interest to the account holder. Similarly, when an individual invests in a company (through [[corporate bond]]s, or through [[stock]]), the company is borrowing funds, and must pay interest to the individual (in the form of coupon payments, [[dividend]]s, or stock price appreciation).<ref name=Moyer/>
The interest rate is the change, expressed as a percentage, in the amount of money during one compounding period. A compounding period is the length of time that must transpire before interest is credited, or added to the total.<ref name=Broverman/> For example, interest that is compounded annually is credited once a year, and the compounding period is one year. Interest that is compounded quarterly is credited four times a year, and the compounding period is three months. A compounding period can be any length of time, but some common periods are annually, semiannually, quarterly, monthly, daily, and even continuously.

There are several types and terms associated with [[interest]] rates:
*[[Compound interest]], interest that increases exponentially over subsequent periods,
*[[Simple interest]], additive interest that does not increase
*[[Effective interest rate]], the effective equivalent compared to multiple compound interest periods
*[[Nominal annual interest]], the simple annual interest rate of multiple interest periods
*[[Discount window|Discount rate]], an inverse interest rate when performing calculations in reverse
*[[Continuously compounded interest]], the [[mathematical limit]] of an interest rate with a period of zero time.
*[[Real interest rate]], which accounts for inflation.