Rate

What is rate?

Rate is the process of comparing two different quantities. It involves measuring the difference between two values or objects and then expressing it as a proportion or ratio. For example, the rate of inflation is the percentage change in the price of goods and services over some time. The rate of interest is the amount of interest paid or earned on a sum of money over a while. The rate difference between the inflation rate and the interest rate can significantly impact economic decisions.

Rate vs Price

Price and rate are two financial concepts that have an important relationship with each other. Price refers to the amount people are willing to pay for a good or service, while a rate is a measure indicating how much of that item can be bought or sold over a certain period. Understanding the differences between these two terms can help you make sound investment decisions.

Feature	Price	Rate
Definition	A fixed amount of money for a specific good or service.	A cost based on time or quantity (like per hour or per unit).
Context	Used in transactions involving tangible goods or services.	Commonly associated with ongoing services or charges that accrue over time.
Calculation	Simple; the stated amount for a product or service.	Requires calculation based on duration or quantity (e.g., hourly rates).
Variability	Can be negotiated and may change based on market conditions.	Typically remains consistent until changed (e.g., interest rates).
Examples	The price of a loaf of bread is $2.	A gardener's rate is $50 per hour.