How Do You Read an Interest Rate Graph?


Quick Answer

Interest rate graphs can be read in several ways, says the U.S. Treasury. Such graphs show exactly when interest rates reached certain levels and for how long, allowing users to determine specific interest rate values at certain times and to calculate values over time, such as median and mean rates.

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Full Answer

Most graphs that show change occurring over time use the horizontal, or x, axis of the graph to mark regular time intervals, according to MathIsFun.com. The graph's vertical, or y, axis is used to indicate the changing level of the value being measured, also in regular intervals. An interest rate graph would therefore show changes in rates on the y axis, measured against monthly time intervals on the x axis. The graph could show changes in any kind of interest rate, such as interest rates for home mortgages, car loans or the interest rate paid on U.S. Treasury bonds.

To determine an interest rate at a specific point in time, find the desired point in time on the x axis. The interest rate for that time is shown by the vertical height of the plotted graph line directly above that point, as measured by the units on the y axis.

To calculate the mean, or average, interest rate over a given period of time for a given number of time intervals, such as months, add the values of the rates for each month, then divide the total by the number of months, according to MathIsFun.com. To find the median interest rate, or the interest rate with the same number of rates above and below it during the given time period, order the monthly interest rates from lowest to highest. The middle interest rate on that list is the median.

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