Tracking Borrowing Costs
Think fast: Where was the prime rate a year after Ronald Reagan entered the White House? And how far -- and how rapidly -- did it tumble during the succeeding months?
If you're having trouble dredging up the answers* to those simple questions, don't panic. A new book compiled by Citicorp, Interest Rate Spreads Analysis (Probus, Chicago, 1992, $65), will help you recall the surges and slumps of more than 30 key money rates over the past decade as fast as you can say, "Alan Greenspan."
As a reference book, it deserves a place on any borrower's bookshelf. Besides providing succinct refreshers on money terminology (such as federal funds and LIBOR, aka London Interbank Offered Rate), the book includes graphs showing how various rates have performed over time in relation to one another (the prime compared with, say, the rates for three-month certificates of deposit or treasury bills).
Unfortunately, the book won't predict the future course of interest rates. But it will help you figure out some financing possibilities -- and, of course, how to recognize a good deal when you see it. -- Bruce G. Posner* * *
Answers: 16.5%; rate fell 6% by end of 1982.