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Indexed Rate |
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An indexed rate is an interest rate that is calculated based upon two variables. The first variable is the base rate or the "margin" which typically is expressed as a percentage or points. The second variable used in calculating the indexed rate is usually one of the common published rates such as the Prime Interest Rate, as published in the Wall Street Journal, or the U.S. Treasury Bill (T-Bill) rate, or the LIBOR. The indexed rate, or the final interest rate, is determined by adding the base or margin to the published index rate. When choosing a loan it’s worthwhile to fully understand how the indexed rate is calculated.
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Credit Card Definitions > F - M > Indexed Rate
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