As is widely known, arbitrators in New York will award interest to the prevailing party based on
the Commercial Prime Rate that banks commonly charge their business customers. These rates change at
the whim of the Federal Reserve Board. Since it often takes years before arbitration matters are brought to a final conclusion, it is probable that the prime rate has changed more than once over the course of the time taken to adjudicate the disputes.
As a service to our friends and Members we are pleased to provide, herein, a quick and accurate method for calculating interest at the prime lending rate as published by the Federal Reserve Bank.
By clicking the link below one can navigate to a spread sheet which can be used to calculate simple interest accumulated on a known principal over a period between two known dates. It is recommended that you save this file to your own computer. Click here to bypass the instructions and go directly to the INTEREST CALCULATOR.
A sample entry is shown in line 3. Columns E, F & G are "input" columns where entries are revealed in green color. When inputting dates, please use the format indicated in the sample entry. Also, omit the $ sign when inputting the principal, as this sign is automatically assigned by the operating program. The calculated average interest rate and the simple interest for the period show up in columns H & I, respectively, in red color. The number of days in each period and the cumulative interest are returned in columns J & K, respectively. To determine the quoted prime rate for a particular day or days, enter the date(s) in the optional column L. The quoted prime rate for that day will be returned in column M.
The spread sheet, created in LOTUS 123, can be opened using most spread sheet programs, including MICRSOFT EXCEL. It contains the daily prime interest rate historically in effect for each and every day, beginning January 1, 1992 up through the current date. Interest data are hidden but can be viewed by revealing columns A, B & C. The daily interest values were obtained from the Federal Reserve Bank website at Daily Bank Prime Commercial Loan Rates.
Our database reflects the last change in interest rates took effect on December 16, 2008 at 3.25%. We will make every effort to keep our database current, but if you know that there has been a subsequent change by the Fed, it is likely that we have not yet made the appropriate update to our database and we would appreciate a reminder.
Assuming you have downloaded the spread sheet file to your computer, you should replace that file after each interest rate adjustment by the Fed, and after we have updated our database. Alternatively, you can modify the previously downloaded file on your computer by adding the subsequent dates in column A and the new interest rate in column B.
If you have problems utilizing this service, or wish to offer comment, please send an email to our Technical Committee. Of course, the user of this spreadsheet assumes full responsibility for the results. The SMA cannot and will not be responsible for the consequences resulting from the use of this calculation device.
Click here to access the INTEREST CALCULATOR.
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