## STATEWIDE INTEREST RATE CALCULATION

The statewide interest rate is calculated from all bonds and BANS issued between July 1 and June 30 of each aid year. This rate serves as the final rate for that year as well as the preliminary rate for the following aid year. For example, the rate calculated based on borrowings between 7/1/0X-6/30/0Y will be permanently tied to projects with Commissioner Approval Date (CAD) falling between those same dates. That rate will also be tentatively applied to projects with a CAD falling between 7/1/0Y-6/30/0Z until a permanent rate based on borrowings between 7/1/0Y-6/30/0Z is established in the Fall of 200Z.

The interest to be paid (from each amortization schedule) is summed. Any accrued interest or premiums are deducted and the resulting amount is added to the statewide interest paid accumulator. This accumulator is the numerator for the statewide calculation.

The denominator comes from a calculation that involves the year of amortization and the principal payment for that year. These fields are multiplied together and the result for each line of the amortization schedule is summed to a total field for the debt instrument. This total field is then added to a statewide total field for principal * year.

The statewide rate calculation is the (numerator / denominator) times 100. The result is then rounded to the nearest 1/8 of one percent for the actual statewide interest rate.

The following is an example of the calculation of a statewide rate that would result from a sample of two bonds and two bans.

BOND-1 12 Year Amortization | . | BOND-2 15 Year Amortization | ||||||
---|---|---|---|---|---|---|---|---|

No Accrued Interest Amount: $10,175,000 Date: 9/10/2002 |
Accrued Interest $2,426 Amount: $14,000,000 Date: 5/29/2003 |
|||||||

Year | Principal | Interest | Principal*Year | Year | Principal | Interest | Principal*Year | |

1 | 915,000 | 209,224 | 915,000 | 1 | 745,000 | 436,696 | 745,000 | |

2 | 850,000 | 278,238 | 1,700,000 | 2 | 760,000 | 418,070 | 1,520,000 | |

3 | 865,000 | 261,238 | 2,595,000 | 3 | 775,000 | 399,070 | 2,325,000 | |

4 | 885,000 | 241,776 | 3,540,000 | 4 | 795,000 | 379,696 | 3,180,000 | |

5 | 905,000 | 220,756 | 4,525,000 | 5 | 825,000 | 359,820 | 4,125,000 | |

6 | 930,000 | 193,606 | 5,580,000 | 6 | 855,000 | 339,196 | 5,130,000 | |

7 | 960,000 | 166,868 | 6,720,000 | 7 | 890,000 | 317,820 | 6,230,000 | |

8 | 900,000 | 138,068 | 7,200,000 | 8 | 920,000 | 291,120 | 7,360,000 | |

9 | 925,000 | 108,818 | 8,325,000 | 9 | 955,000 | 263,520 | 8,595,000 | |

10 | 800,000 | 77,600 | 8,000,000 | 10 | 990,000 | 232,960 | 9,900,000 | |

11 | 830,000 | 49,600 | 9,130,000 | 11 | 1,030,000 | 200,290 | 11,330,000 | |

12 | 410,000 | 16,400 | 4,920,000 | 12 | 1,060,000 | 166,300 | 12,720,000 | |

13 | 1,095,000 | 130,526 | 14,235,000 | |||||

14 | 1,130,000 | 92,200 | 15,820,000 | |||||

15 | 1,175,000 | 47,000 | 17,625,000 | |||||

Sub Total | 4,074,284 | |||||||

Minus Accrued Int | 2,426 | |||||||

Totals | 1,962,192 | 63,150,000 | Totals | 4,071,858 | 120,840,000 |

BAN-1 | BAN-2 | ||
---|---|---|---|

Amount: | $2,640,000 | Amount: | $19,350,000 |

Date: | 10/22/2002 | Date: | 6/17/2003 |

Year: | 1 | Year: | 1 |

Principal: | $2,640,000 | Principal: | $19,350,000 |

Interest: | $37,488 | Interest: | $266,062 |

Principal*Year: | $2,640,000 | Principal*Year: | $19,350,000 |

Total Interest: | $37,488 | Total Interest: | $266,062 |

Total Principal*Year: | $2,640,000 | Total Principal*Year: | $19,350,000 |

BOND/BAN | Interest | Principal*Year |
---|---|---|

Bond-1 | 1,962,192 | 63,150,000 |

Bond-2 | 4,071,858 | 120,840,000 |

Ban-1 | 37,488 | 2,640,000 |

Ban-2 | 266,062 | 19,350,000 |

Totals | 6,337,600 | 205,980,000 |

Rate calculation is (Total Interest/Total Principal*Year) * 100

- Total Interest - 6,337,600
- Total Principal*Year - 205,980,000
- Calculated Rate - 3.077

Calculated Rate Rounded to nearest 1/8 = 3.125%

Calculated Statewide average rate rounded to nearest 1/8 = 3.875%