What is the difference between contractual interest rate and market interest rate?

Please explain it as simple as you can. Thanks!





What I understand so far is market interest rate is the rate investors demand for loaning funds to the company. I don't really get what a contractual interest rate is.|||The accounting profession requires that significant amounts of bond discount or premium be amortized by using the effective interest rate. Under this method, the effective interest rate (at the time the bonds were issued) is multiplied times the bond鈥檚 carrying value. The result is the amount of interest expense for each reporting period. The difference between this expense and the actual interest paid will be the amount of discount or premium that is being amortized during the reporting period. The effective interest rate method ensures that the interest expense on the income statement will be directly related to the bond amounts on the balance sheet.|||This is my personal website


http://www.24forextrading.com/


where you can find a lot of answers in your questions.





And this is the company which I trust for my investments. No problem with them the last 4 years.





http://www.easy-forex.com/Gateway.aspx?gid=94483





But if you want more info, just send me a pm.


I hope that it was helpful.


Source(s):


http://www.24forextrading.com/


http://www.easy-forex.com/Gateway.aspx?gid=94483