Enter the federal funds target rate (%) into the Calculator. The calculator will evaluate the Average Prime Rate. 

Average Prime Rate Formula

APR = FFTR + 3%

Variables:

  • APR is the Average Prime Rate (%)
  • FFTR is the federal funds target rate (%)

To calculate the Average Prime Rate, add 3% to the federal funds target rate.

How to Calculate Average Prime Rate?

The following steps outline how to calculate the Average Prime Rate.

  1. First, determine the federal funds target rate (%). 
  2. Next, gather the formula from above = APR = FFTR + 3%.
  3. Finally, calculate the Average Prime Rate.
  4. After inserting the variables and calculating the result, check your answer with the calculator above.

Example Problem : 

Use the following variables as an example problem to test your knowledge.

federal funds target rate (%) = 1.5