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Interest Rates

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maher98 | 19:10 Sat 25th Apr 2009 | Business & Finance
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Is FED or LIBOR insterest rate is on reducing basis or flat rate?
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I'm not sure what you are asking. The rate is the true rate
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What I mean that current LIBOR is at 1.92% this week. If someone takes a loan of 100,000 for 1 year, will the interest calculation be as follows:
100,000 * 1.92% = 1,920 which is flat rate OR
100,000 * (1.92% / 1.68) = 1,000 which is reducing rate. The same goes for FED rate.

Hope I've clarifed my question.
Still clear as mud.

Where does 1.68 come from?
Question Author
Pls check this site for LIBOR rates
http://www.bankrate.com/rates/interest-rates/l ibor.aspx

Hope you can clarify.
The LIBOR is the interest rate banks charge for lending money to each other,not to the general public.
Yes I've had a look at that site - it still doesn't help to understand the question.

One possible answer is that it's up to the parties to the loan to decide how the interest rate (which is just a figure) is applied in their particular case. Well normally the lender would stipulate it.

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