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13
votes
7answers
2k views

Is there any instance where less leverage will get you a better return on a rental property?

The larger a mortgage I have on a property the less money I have to put up front so my initial cash flow is worse but my cap rate and overall return is better. However the larger my down payment the ...
0
votes
1answer
47 views

Comparing the present value of total payment today and partial payments over 3 months

I'm trying to buy something. I can either pay $2495 in a lump sum payment, or $997 over 3 x monthly instalments. Let's say I can invest in the stock market and get an 8% return on my money. What's ...
5
votes
2answers
173 views

How has this compound interest been calculated?

I'm trying to recreate a credit account statement from mathematical principles in order to verify its veracity. This is because I suspect I've been charged an additional payment after supposedly ...
0
votes
2answers
39 views

How do I calculate annualised yield from simple interest paid quarterly?

A one-year bank deposit pays 7.25% per annum simple interest, paid quarterly. In other words, it pays 7.25 / 4 = 1.8125% every quarter, for four quarters. If I were to reinvest this interest, I will ...
1
vote
1answer
35 views

Compound Rate as a Function of Market Interest Rate

I have these two pictures from Investopedia. Here is the link to the page. I am confused by this concept. How is the quarterly compound rate 11.825% with a 12% annual rate? Furthermore, how is ...
1
vote
2answers
69 views

How to get interest earned from start of repayment to a specific date on a declining balance?

I need a formula in getting the interest earned from start of payment of my loan to a specific date. I know the formula for the current due interest, which my company have given me in excel: days = ...
4
votes
1answer
64 views

The penalty on early redemption of a personal loan

According to the TOS written here: https://www.sc.com/sg/personal-banking/tnc/en/_pdf/cb_all-tnc.pdf (bottom of page 51) 37.2 The following terms and charges will apply if you close the CashOne ...
4
votes
3answers
144 views

How to know how much interest paid per payment in a fixed tenor personal loan

I recently took up a personal loan. I do not have any financial background and I do not have any issue paying the loan but I am just curious on how they come out with some numbers. To be precise, the ...
0
votes
1answer
98 views

How does compound interest work with multiple bank accounts and percentage limits?

I found that Polish banks often offer smaller interest rates for amounts above a given threshold. For example this one (Google Translate) would make one earn 2.70% per year of amount below 100 000 PLN ...
6
votes
3answers
160 views

401k compound interest vs other compound interest

Whenever I see the presentations or documents imploring me to invest in 401k and retirement, it always shows a nice graph showing a 7% compound interest and how less money saved earlier in your 20s ...
1
vote
2answers
45 views

How do I calculate Future value adding fund charges?

Here is the statement on the NEST website. "We take a small percentage of the money going into your pot known as a contribution charge. This amount is 1.8 per cent." They then also charge £15 ...
2
votes
2answers
126 views

Compounded Interest on Mutual Funds

I may be missing or misunderstanding something regarding how compound interest works with mutual funds and ETFs. Let's say I have $10,000, and I invest said monies in mutual fund XXXXX at $100/share, ...
2
votes
1answer
58 views

Future Value of an annuity

If I pay 4 half-yearly installments in an investment scheme or I pay monthly installments of the same time (2 years). Interest rate in both cases is 9% compounded monthly. What will be my future value ...
2
votes
2answers
631 views

home loan part payment with emi effect - revised emi amount?

Loan Amount 1,215,371.00 Annual Interest Rate 10.15% Term of Loan in Years 12 First Payment Date 10/09/2014 Payment Frequency Monthly Compound Period Monthly ...
1
vote
1answer
32 views

Why SUM(PMT) is not identical to FV?

I'm exploring financial functions in a spreadsheet. When I use FV, which is based on FV = PV*(1+r)^n I get a different number than when using PMT and multiplying by the number of periods. For example:...
-1
votes
2answers
78 views

Why real estate investments are compared via “cap rate”?

Cap rate does not include repayment of loans (such as mortgage), and therefore does not represent reliably the annual balance. Why use cap ratio if another benchmark, such as ROI, provides similar ...
2
votes
1answer
168 views

Calculating average interest rate with intermittent deposits

I invest in a few medium to low risk accounts online (peer to peer loans and buy to let property crowdfunding). I make regular deposits into these accounts, usually when the monthly salary comes in, ...
2
votes
1answer
1k views

Excel formula for amortization schedulefor a loan with daily compound interest

Can anyone help me. I'm after an amortization schedule for loans that has a daily compound interest added with a monthly repayment. I've calculated the monthly repayment but I can't find an excel ...
0
votes
1answer
1k views

Getting compound interest calculation wrong but don't know why

Investopedia says that the formula for compound interest is Ic = P[(1 + rN) − 1] Which due to the Order of Operations can be heavily simplified to Ic = PrN (and I checked via Wolfram Alpha ...
2
votes
2answers
1k views

converting annual interest rate to monthly when compounding frequency known

Just like the title I'm looking for the formula to convert APR to monthly when I also know compounding frequency eg APR is 8% and being compounded daily what is the monthly interest rate I earn. Or ...
0
votes
1answer
92 views

Compounded and Simple Interest Rates

Suppose we have a loan worth 10000 that is being repaid late as a lump sum on a given day 30 days after the due date. Suppose the original interest rate is 5% so that the amount owed before late ...
1
vote
1answer
506 views

Annuities and varying interest rates?

The gist: Let's say I have $12,000 and have $240 a week in which I can invest into an ordinary annuity. Let's say I invest $1040 a month as opposed to $240 a week. The interest rate is 3% p.a. ...
2
votes
1answer
279 views

What's the formula for the future value of continuous compounded interest with an initial amount and annuity/monthly payments/investments?

I know the formula for continuous compounded interest with monthly payments/investment is this, p = monthly payment i = interest per year c = compounded times per year t = times compounded FV = p((1+...
2
votes
2answers
88 views

How do I determine the performance of my retirement fund with regular monthly contributions?

My retirement fund [Australian Superannuation fund] can be checked at any time. The fund invests in shares, which can go up - or down. Money is going IN regularly [monthly]. At any given time, how do ...
2
votes
1answer
83 views

Effective Interest Rate Interpretation

Assume a $1,000 loan for 24 months, with monthly interest rate 2.5%, and monthly payments ($55.91 as calculated by any online tool, e.g. here). This will give us annual interest rate (air) of 30%, ...
1
vote
1answer
119 views

Compound Interest Calculation

In __________ years a sum will double at 5% per annum compound interest. Options given are: a. 15 years 3 months b. 14 years 2 months c. 14 years 3 months d. 15 years 2 months The way to solve ...
0
votes
1answer
253 views

What is the formula for calculating the amount of money I end up with in a given period (salary and compounding effect)?

I'll give a concrete example (couldn't find a similar question): Let's say I have an amount of money M at time t = 0 (first month). Every month, I get a given amount (let's say constant) of R On my ...
-1
votes
1answer
48 views

Why use ROI if I can use effective compount interest?

According to Wikipedia, return on investment = (gain from investment – cost of investment) / cost of investment However this calculation does not take into account the time passed between the ...
3
votes
1answer
177 views

Question related to Public Provident Fund interest calculation

Consider the following extract from a newspaper article : The interest on your PPF balance is compounded annually, but the calculation is done every month. The interest is calculated on the ...
2
votes
2answers
118 views

How do banks calculate interst on savings account

Sometimes, I see banks advertise rates on savings accounts like this: Interest is calculated daily and compounded semi annually. Now if it is compounded semi annually , how can it be calculated daily? ...
1
vote
1answer
206 views

Everyone says you should start saving young. However, should my priority be to pay off my mortage? [duplicate]

Everything I read says you should use time to your advantage and start saving as soon as possible. However, I have a home mortage with an interest rate higher that what one could expect to make out of ...
3
votes
4answers
2k views

Do my 401k/Roth accounts benefit from compounding?

I've always read that the great benefit of 401k's and IRA's are the compounding of interest. My entire 401k invests in a S&P index fund and I make semi-monthly contributions and there is one ...
0
votes
2answers
75 views

Find the compound return

If I have a specific amount of money. For example 1000€ at the beginning of the 2008 year. -65.55 2008 91.25 2009 17.74 2010 -42.87 2011 18.32 2012 -18.82 2013 56.57 2014 How much money ...
2
votes
2answers
295 views

Systematic investment plan interest calculation

How can I calculate the effective compound annual growth rate (http://en.wikipedia.org/wiki/Compound_annual_growth_rate) for a systematic investment plan (http://en.wikipedia.org/wiki/...
3
votes
1answer
153 views

Understanding Effective Annual Interest Rate concept

I am trying to understand the effective interest rate concept with an example. All I know about it is the following formula: EAR = (1+r/n)^n -1 , where n = number of periods r = stated interest rate ...
-1
votes
1answer
187 views

Calculate Finance Rate, Interest Amount when we have below line Fees

Since i am not from Finance and Software Developer i find it difficult to create formulaes I have these inputs: Principal Sum: Interest Rate: Below Line Fee: Number of Payments: True Rate or ...
1
vote
2answers
255 views

Suppose earning an APR of 7% for 5 years, with interest compounded quarterly. What is the EAR? What is the Total Return?

Suppose you earn an APR of 7% for 5 years, with interest compounded quarterly. What is your EAR? What is your Total Return? The part I am confused is "with interest compounded quarterly" The ...
2
votes
2answers
398 views

Help with Loan Amortization Question

Hello I'm stuck on a question if anyone could walk me through on the steps that would be great. This is a loan Amortization question The principal amount is $100,000 The Interest Rate is 3% The ...
4
votes
3answers
451 views

How can I calculate yearly interest of my investment gain?

I'm trying to figure out the yearly interest of a potential investment. Lets say I invested $10 000, 13 days later i cash out and I now have $10 500. The interest here is 4,76% for 13 days. But can I ...
1
vote
1answer
479 views

What are the standard industry practices or disclosures for computing compounded interest on retail deposit accounts in the United States?

I'm seeking to understand how my bank calculates the interest on my various deposit accounts (Money Market, Interest Checking, Savings, Certificate of Deposit) in order to simulate and predict it to a ...
4
votes
4answers
15k views

What's the formula to calculate the monthly or lump-sum investment amount for a desired future value?

Give the following values: Inflation Rate 2% Expected Return Rate 5% Future Value 1,000,000 monetary units Years to Target - 10 What is the formula to calculate the amount of? Lumpsum investment ...
3
votes
2answers
378 views

Annuities question - Equations of value

Chuck needs to purchase an item in 10 years. The item costs 200 today, but its price inflates at 4% per year. To finance the purchase, Chuck deposits 20 into an account at the beginning of each year ...
2
votes
1answer
6k views

How to determine the final value of a U.S. Savings Bond at maturity?

Is it possible to determine the "final" value of a U.S. Savings Bond on its maturity date? The interest rate is fixed, the compounding periods are known (semi-annually for EE bonds), and the term is ...
1
vote
2answers
626 views

What is a formula for calculating equity accumulated while repaying car loan?

I'm going to buy a used car (maybe a Honda CR-Z), pay for it with a bank loan, then resell it in two years when I move. I'm trying to create a Google Docs spreadsheet to figure out how much more money ...
0
votes
1answer
108 views

Annuities of a non-annual time span

I am having trouble answering this question with any confidence and have no way to check my answer. I was hoping for a walk-through? I plan to save $100 at the START of each month for the next two ...
2
votes
1answer
482 views

Can I go from a stated annual rate compounded annually to a semestral effective interest rate?

If the compounding period is one year, so in 6 months you haven't earned any interests yet, therefore you wouldn't be able to use the formula for the equivalent rate, one should use the formula for ...
2
votes
3answers
369 views

Interest rate question

I'm having a little trouble figuring this out. Suppose I took out a loan with the following terms: Loan Amount: 1,000 Interest Rate (APR): 10% Compound Frequency: Monthly (12 compounding periods) ...
2
votes
1answer
308 views

Recurring deposit interest calculation compounding period rule in India

Is there any RBI guideline or rule or guideline available for Recurring Deposits interest calculation compounding period for Indian Banks. I find it different for different banks in India and the ...
10
votes
2answers
2k views

Continuous compounding in practice

A common explanation for the mathematical constant e (2.71828...) is that it is the factor by which an investment would grow at 100% interest rate over a period if it is continuously compounded. In ...