The cost of manufacturing and distributing new money has no direct impact on interest rates.
The interest rate is the amount a lender charges a borrower and is expressed as a percentage of the principal—the amount loaned. An interest rate can also be used to the amount earned at a bank or credit union from a savings account or certificate of deposit. The interest rate is the amount that a lender charges a borrower on top of the principal for the use of assets. An interest rate is also applied to the amount earned from a deposit account at a bank or credit union. The majority of mortgages employ basic interest. However, some loans use compound interest, which is charged not just to the principal but also to the accrued interest from previous periods.
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