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.

- First, determine the federal funds target rate (%).
- Next, gather the formula from above = APR = FFTR + 3%.
- Finally, calculate the Average Prime Rate.
- 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