Fed cuts the federal funds rate and the discount rate and the prime goes down to 3.5 percent. Al Truistyk owns an exercise center and needs to upgrade his equipment in order to meet his customers' needs. the equipment costs $275,000 and the lender requires a 10 percent down payment. Al must borrow $250,000 and the lender agrees to a 60-month fixed principal fixed interest rate loan with a rate of prime plus 4 percent.