Interest rates are the charges which are levied by the banks for lending a loan. As businesses borrow money from the banks from time to time, increase in Interest rates will directly influence the business. With the increase in interest rates will lead to increase in interest expense. In such a case businesses will have to incur higher costs to repay the loan. Along with the businesses, interest rate changes also affect customers who in turn will affect the business. Individuals in such cases have to pay higher amount to borrow the money, ultimately declining the demand for large products.