Page 424 - Encyclopedia of Business and Finance

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Interest Rates

to success in this challenge is interactivity—the activity of reproduce online some of the advantages of collaborative
“filling in” the knowledge presented in the medium. peer learning. When utilized effectively, such communica-
Strategies for interactivity can be divided into three parts: tion can give people more direct and more convenient
passive, hyperlinked, and interpersonal. access to others and can make individual contributions
more formal, thoughtful, and precise.
PASSIVE INTERACTIVITY
Synchronous learning involves the simultaneous interac- SUMMARY
tion of instructor and student. The traditional classroom All learning is a function of interaction. In taking training
is the traditional example of synchronous interaction onto the Internet, instructors have an opportunity to
where the instructor and students are in the same place at script levels of interactivity in ways previously unavailable.
the same time. Distance learning, where the instructor To do so, however, requires rethinking online activities—
and students are at different locations at the same time, not merely as means of assessment, but as the primary way
frequently involves audio/visual connections and “chat to involve us and make learning “cool.”
rooms.” Asynchronous learning, on the other hand,
involves the interaction of instructor and student at differ- SEE ALSO Artificial Intelligence; Information Processing
ent times.
“Passive interactivity” need not be a contradiction in BIBLIOGRAPHY
terms, because one of the problems with digital instruc- Gates, William H., III. (1999). Business @ the Speed of Thought.
tion is the loss of context—both physical and psychologi- New York: Warner Books.
cal—that a classroom setting provides. To compensate for McLuhan, Marshall. (1964). Understanding the Media. Cam-
this, online training needs to create a visual “focus” for the bridge, MA: MIT Press.
lesson at hand—a referential map of where the student has Shapiro, Carl, and Varian, Hal. (1998). Information Rules: A
been, and where he or she is headed, to provide a context Strategic Guide to the Network Economy. Campbridge, MA:
Harvard Business School Press.
for where he or she is now. Such a context allows a student
to relate the subject matter of an individual lesson to the Varian, Hal R., Farrell, Joseph & Shapiro, Carl (2004). The eco-
nomics of information technology: an introduction. Cambridge
larger scope of the course. Passive interactive page designs
& New York: Cambridge University Press.
are thus “interactive” because the visual mapping succeeds
in making the student actively aware of its importance by
providing a broader context for the current lesson. Philip D. Taylor

HYPERLINKED INTERACTIVITY
The key to asynchronous learning is “hyperlinked interac-
tivity,” a feature of HTML, which makes possible the cre- INTEREST RATES
ation of multiple-choice questions, expert systems, and
other such branching-informational models. Branching An interest rate is a standardized measure of either: (1) the
models approximate the way people actually work cost of borrowing money or (2) the return for lending
through problems. Individuals take different paths, ask money for a specified period of time (usually one year),
different questions, and need different information. such as 12% annual percentage rate (APR).
While books can utilize limited branching schemes in a First consider the term “interest” from the perspective
clumsy way, only computers have complex and speedy of a borrower. In this case, “interest” is the difference
branching capabilities. Complete interaction, combined between the amount of money borrowed and the amount
with accessibility at our convenience, exact repeatability, of money repaid. Interest expense is incurred as a result of
and uniform quality gives asynchronous online learning borrowing money. On the other hand, interest revenue is
the potential, in suitable situations, of not merely replac- earned by lending money.
ing the traditional learning experience, but surpassing it.
For example, the amount of interest expense, as a
result of borrowing $1000 on January 1, 20XX, and
INTERPERSONAL INTERACTIVITY repaying $1,120 on December 31, 20XX is $120 ($1,120
Even asynchronous projects benefit from the variety of – $1,000). The lender, on the other hand, received $1,120
communication options now available on the Internet, on December 31, 20XX in exchange for lending $1,000
including e-mail, listservs, and electronic bulletin boards. on January 1, 20XX, or a total of $120 in interest revenue.
Such communication, which can be roughly grouped Thus, with regard to any particular lending event, interest
under the heading of “interpersonal interactivity,” helps to revenue equals interest expense.

ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION 401