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Both bonds are equally sensitive the 10-year bond the 5-year bond time to maturity .An interest rate is the amount of interest that is payable each period stated as a percentage of the amount that was lent, deposited, or borrowed.
The principal amount, interest rate, frequency of compounding, and length of time the loan, deposit, or borrowing was made all contribute to the total amount of interest on a loaned or borrowed sum.An interest rate provides information on how costly borrowing is or how profitable saving is. As a result, the amount you pay for borrowing money, stated as a percentage of the total loan amount, is the interest rate if you are a borrower.The interest rate, which is the proportion of the principal amount that the lender or other financial institution charges, can be calculated using the interest rate formula.
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