The interest rate is determined based on the Wall Street Journal Prime Rate. We determine the periodic rate, and the corresponding annual percentage as follows. We start with an independent index, (the Index) which is the Wall Street Journal Prime Rate. When a range of rates has been published, the highest rate will be used. We will use the most recent index change as of the 20th day of the month preceding any annual percentage adjustment. To determine the periodic rate that will apply to your account we add a margin to the value of the index. Then we divide the sum by the number of days in a year (365). To obtain the annual percentage rate we will multiply the periodic rate by the number of days in a year (365). This result is the annual percentage rate.
The maximum Annual Percentage Rate that can apply is 18% or the maximum permitted by the law whichever is less. However, the Annual Percentage Rate will never go below the minimum rate of 4% at any time during the term of the plan after the expiration of any discount period.