The cost of debt service paid by a borrower or issuer to a lender or investor. The rate is expressed as an annual percentage of the amount borrowed. For some notes and bonds that pay interest semiannually, the semiannual interest due to the investor used to be evidenced by a coupon that could be detached and sent for collection. Thus the cost to the issuer for notes and bonds paying semiannual interest is often called the coupon rate. Lenders or investors may receive a yield that is higher or lower than the rate.
Rate is the permanent commitment of salary resources, is always associated with an authorized position, and based on annual gross salary. The total cost of a position includes salary dollars plus employer matching fringe benefit amounts for Social Security, health insurance, life insurance, and retirement contributions.