The interest rate is the price of loanable funds in financial markets, and the equilibrium interest rate is the price that equates the demand for and supply of loanable funds. Interest rates may move from an existing equilibrium level to a new equilibrium level as the result change in the supply of or demand for loanable funds. For example, if the quantity of loanable funds being demanded increases due to new business opportunities, suppliers of loanable funds will need to be offered a higher interest rate so that the supply of and demand for loanable funds will be brought back into balance. What is the interest rate, and how is it determined?