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    What does it mean when the government makes a 0% interest rate?

    Question #100710. Asked by dj168. (Nov 01 08 6:27 PM)


    zbeckabee

    		It means that there is no interest charged on the loan and only principal is repaid.

    http://www.dailymail.co.uk/news/article-1080826/Britain-need-0-rate-avoid-depression-warns-economist.html

    http://en.wikipedia.org/wiki/Interest

    http://www.nytimes.com/2008/10/30/business/economy/30zero.html

    Nov 01 08, 10:16 PM
    dj168

    		Can you please explain it easier lol? No interest charged on a loan? What's principal. Do you mean like if you owe a bank 100 dollars. And the interest is 1% then you owe 1 dollar?

    Nov 01 08, 11:01 PM
    zbeckabee

    		If I loan you $100 dollars at 0% interest...You will owe me $100 and I will not charge you interest. You will only repay the $100 which is the principal.

    Nov 01 08, 11:11 PM

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