what does it mean when interest rate is expressed only as a percentage?

When an interest rate is expressed only as a percentage, it represents the cost of borrowing or the return on investment relative to the principal amount, typically over a year. This percentage indicates how much interest will accrue on the principal, helping borrowers and investors understand the financial implications of loans or savings. It simplifies comparisons between different financial products, although it may not fully capture factors like compounding frequency or additional fees that could affect the overall cost or return.