The Prime Rate is a benchmark interest rate that commercial banks charge their most creditworthy corporate customers. It's often used as a reference point for other interest rates, including variable-rate loans and credit cards. While the Prime Rate is influenced by the Federal Reserve's target for the federal funds rate, it is set independently by each bank.
function calculatePrimeRate() {
var federalFundsRateInput = document.getElementById("federalFundsRate");
var primeRateSpreadInput = document.getElementById("primeRateSpread");
var resultDiv = document.getElementById("result");
var federalFundsRate = parseFloat(federalFundsRateInput.value);
var primeRateSpread = parseFloat(primeRateSpreadInput.value);
if (isNaN(federalFundsRate) || isNaN(primeRateSpread)) {
resultDiv.textContent = "Please enter valid numbers for both fields.";
return;
}
// The Prime Rate is generally the Federal Funds Target Rate plus a spread.
// This is a simplified model, as banks set their own rates.
var primeRate = federalFundsRate + primeRateSpread;
resultDiv.textContent = "Calculated Prime Rate: " + primeRate.toFixed(2) + "%";
}