Treasury bills are backed by the United States Treasury and widely regarded as a risk-free investment. Many banks use Treasury bills as an index for determining adjustable interest rates because the T-Bill is considered a benchmark for such loans. Banks set rates based on several different Treasuries, but the 13-week and 26-week bills are most commonly used for calculating the effective rate on an adjustable rate mortgage (ARM) index.

### 3-Month T-Bill ARM Index

Browse to Treasury.gov and locate the most recent 13-week T-Bill auction price. These secondary auctions are held every Monday and rates are published the next day. Find the 13-week T-Bill "Auction High Rate" and you can simply use that figure for the index.

Subtract the highest auction price from 100 and then divide this figure by 100. For example, if the price is listed at 99.116542, you subtract this from 100 to get 0.883458 and then divide by 100 to get 0.00883458.

Multiply this figure by 360 and divide by 91 to calculate the discount rate, which represents the 3-Month T-Bill ARM index. In the example, this gives you a discount rate of 0.03494999, or 3.494999 percent.

Round this figure to two decimal places. In the example, the 3-Month T-Bill ARM index is 3.50 percent.

### 6-Month T-Bill ARM Index

Browse to Treasury.gov and look up the September 26-Week Treasury Bill auction data. You want the "high rate" for each weekly auction held in the month of September. As an example, assume that five auctions were held in September with the following rates: 3.705, 3.570, 3.670, 3.715 and 3.745 percent.

Add the monthly rates together. Continuing the above example, you get a total of 18.42.

Divide by the number of auctions results. The example has five auctions, so divide 18.42 by 5, resulting in a 6-Month T-Bill ARM index of 3.684 percent.

Round this figure to two decimal places. In the example, you would have 3.68 percent.