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 and BOND-2 15 Year Amortization
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 and BAN-2
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 and Ban Summary Table
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%

Last Updated: May 31, 2017