a generic tag for question on rate of interest applicable. Ideally should be accompanied by geography tag and other specific subject tags

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9
votes
3answers
1k views

“Simple interest rate of 0.10%” corresponds to “APY of 2.54%-5.00%”… how?

This checking account says Balances above $5,000 earn a simple interest rate of 0.10%, with a corresponding APY of 2.54%-5.00% APY. I don't understand how a simple interest rate that is a fixed ...
6
votes
2answers
496 views

How do UK Gilts interest rates and repayments work?

I'm looking at UK Gilts and trying to understand how the interest rates and repayments really work. As I understand, if I buy £100 of a "5% Treasury Gilt 2020" it means I will get 5% interest each ...
0
votes
1answer
46 views

Get the maximum interest rate from a bank on short term holdings

Banks in India offer returns at 7% for fixed deposits over a year. In my business, I have a constant cash flow where I am holding small amounts of money for 4-6 weeks. Is there any way to get the ...
4
votes
1answer
95 views

Does my (British) bank have to notify me a specific amount of time before reducing interest rates?

I have some savings for Uni in a 3% interest bank account - the best I can get on that amount of money. However, today (12th of May) I received a letter, from the bank, saying that the interest rate ...
0
votes
2answers
81 views

Remit money to India from balance transfer of credit card

I am a tax resident of USA and citizen of India. Lately, I have been receiving 0% interest balance transfer offers from credit card companies. The offer is - they will charge me 0% interest for 12 ...
2
votes
2answers
194 views

Do high interest rates lead to higher bond yields or lower?

Interest rates & bond yields are positively correlated according to this: http://www.investopedia.com/ask/answers/04/031904.asp Thus High interest rates => High bond yields But at the same time, ...
0
votes
2answers
40 views

Calculating true rate of a loan with an origination fee

If I have a loan of 1000 at a rate of 5% for 3 years compounded monthly, but I pay a 100 origination fee, do I calculate the loan on the original loan amount, or the reduced amount (1000-100)?
8
votes
4answers
3k views

Paying off a loan with a loan to get a better interest rate

I've never had credit or a loan till recently when I bought a new car. This has recently given me a much better credit rating after having the loan for a year with 5 years to go and 2 credit cards ...
3
votes
1answer
109 views

Inflation adjusted total formula for cost of mortgage

True cost of a mortgage when considering inflation has an answer by a Chris Degnen with the relevant formula(s): adjusted = (p - (1 + inf)^-n*p)/inf; pv = Σ p2 (1 + r2)^-k for k = 1 to n ∴ pv = (p2 ...
1
vote
1answer
131 views

Personal Loan or another credit card?

So my friend is trying to get his act together and I'm trying to help him with his finances. His balance on his discover card is ~5000. At one point he was JUST making minimum payments. He got ...
0
votes
2answers
30 views

Calculating Future Value: Initial deposit and recurring deposits of a fixed but different Value

Following scenario: I open a savings account and I deposit 1,000 USD. Now, every year I deposit another 100 USD. The interest rate is 5%. I want to know how much money will be on that savings account ...
1
vote
1answer
34 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 ...
0
votes
2answers
76 views

Comparing Cost of Loans

How do I determine my Cost of Loan from paying a loan off early, or, Assumption: No charges for early payments. Let's say I have a $25,000 vehicle loan and 1.99% APR over 5 years (60 months). Here ...
0
votes
1answer
34 views

Interest Rate vs. Annual Percentage Yield (APY) [duplicate]

I'm curious as to what the difference between the Interest Rate and Annual Percentage Yield is. For example: This Bank I was looking at offers 0.45% interest rate on savings account balances over ...
2
votes
2answers
96 views

Retirement Savings vs. Student Loan payments

I'm currently 23 and deciding if I should pool my extra income every month towards my retirement or student loans. My situation: I believe between saving for retirement and student loan debt I have ...
1
vote
3answers
203 views

What does APR mean I'm paying?

I've read every article and post on the internet and I'm still confused. I'm getting a credit card with a 19.9% APR with no annual or monthly fees. I read that APR is the annual rate for borrowing. ...
2
votes
1answer
47 views

How to calculate the effective interest rate of a loan that must be paid back with interest as lump sum

An example question asks: Student Bank has agreed to lend you funds to complete the last year of your degree. The bank will lend you $2,400 today, if you agree to repay a lump sum of $4,000 in ...
1
vote
1answer
63 views

Why do some institutions offer what seems like illogically high interest rates?

In the UK at the moment there is a company, Milestone Savings, which is offering a 5 year bond with 3.2% interest. You have to deposit £10,000 - and presumably to get the 3.2% have to keep this in ...
1
vote
2answers
64 views

How are bonds affected by the Federal Funds Rate?

My question is how do bonds react to changes in the Federal Funds Rate? Specifically, government bonds, because I don't see corporate bonds being affected as drastically. I've done research, but for ...
2
votes
1answer
150 views

Bond strategies for a steepening yield curve?

If it is believed that the yield curve is going to steepen very soon, it may be fall in short-term rates, a rise in long-term rates, or some combination of these. What strategy should you pursue in ...
2
votes
1answer
89 views

Pay down a big loan or pay off a small one? [duplicate]

I have two student loans I would like to pay off: A: $6000 - 6.5% B: $3000 - 6.5% I am receiving a tax refund of a bit over $3000. I am not sure whether to pay off B in one fell swoop to get it ...
3
votes
2answers
70 views

Calculate APY revolving loan with offset/staggered payment schedule?

I want to buy a weekly meal ticket, 7 lunches for $7, but do not have $7 today. Lender says, "I will loan you a consecutive series of 5 meal tickets for 5 consecutive weeks (35 consecutive lunches as ...
0
votes
2answers
269 views

Should I take out a bigger mortgage, or pay a greater cash deposit?

Let's say I want to buy a house worth £400k. I can get a mortgage up to £300k, and I have £150k cash sitting in the bank. Which would be my best option: 1) Take out the maximum mortgage of £300k and ...
1
vote
2answers
218 views

Should I overpay to end a fixed-rate mortgage early? [duplicate]

About six years ago, UK interest rates hit the historic low of 0.5%. In keeping with all the finiancial advice at the time that this was a once in a lifetime circumstance I rushed out and got a fixed ...
8
votes
3answers
790 views

Downside to temporarily lowering interest rates?

American Express sent me a promotional offer to lower the interest rate on my credit card for 12 months. I don't carry a balance on any credit cards. I can't think of a good reason to accept this ...
1
vote
2answers
102 views

Credit Unions vs Bank Mortgage

I am a first time home buyer. My home-buying credit score is 620. I was recently preapproved for an FHA loan with my bank. The interest rate is decent at 3.75%, the only issue is I will have to pay ...
1
vote
2answers
166 views

How to get rid of bad credit cards without impacting credit report

I have two bad credit cards, one at 11.8% + Prime (working out to about 18%+) and another recently raised to 30% (card issuer swears they did this on every cardholder, and that I'm a member in good ...
3
votes
1answer
87 views

What is the interest rate on my US Savings Bonds?

I have received US Savings Bonds as gifts throughout my life from my birth, to birthdays, to high school graduation. My understanding is that some EE Series US Savings Bonds have a fixed interest rate ...
0
votes
1answer
28 views

Lowest Interest Options for Short-Term Loan

I am looking for a short-term loan in the amount of $15k to buy some household items. I will be able to return the money in full by 3 months I have a credit score of 760+. Currently, I am seeing ...
-1
votes
1answer
90 views

Can banks borrow 0% interest rate loans for overnight speculations? [closed]

I was wondering if banks have the ability to borrow money overnight for speculations at 0% interest rates. Also, would third party providers have access to these short term or overnight loans?
1
vote
3answers
116 views

Is it normal that US Treasury bills(0.07%) yield smaller than interest rate(0.25%)?

I assume that under stable economy, US bonds with longer maturities should yield more. However, the current 3 month bill yields 0.07%( 0.23% for 6 months bills), which is below the overnight interest ...
2
votes
2answers
62 views

How flexible is the loan industry?

I'm wondering how flexible loan officers (or departments) are to providing better rates for more information. For example, is something like a 1% reduction in rate for an auto loan be a reasonable ...
2
votes
1answer
56 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 ...
0
votes
1answer
33 views

Interest rate movements and business decisions [closed]

I read the following statement in my study guide: Wrong decisions, such as using short-term debt to finance long-term projects just before interest rates rise, can be very costly. Why would this be ...
-1
votes
1answer
36 views

how banks hedge interest risk and default risk [closed]

this is probably a naive question. Is it true that banks always prefer to borrow short and lend long liabilities? If so, interest rate on long term loans fluctuate over time. how do banks hedge the ...
2
votes
3answers
216 views

Basic understanding of bonds, values, rates and yields

I'm looking for a very simplistic (ELI5) explanation of how bonds work, but I'm not sure I have the basics correct. As I understand it, a bond is basically a IOU or loan. Any company, government or ...
34
votes
9answers
9k views

How to rescue my money from negative interest?

My bank has announced negative interest rates starting Q1 2016. I have CHF 250'000 in that savings account (Swiss Francs). Now, pretty much all other banks will probably follow suit soon, if they ...
-1
votes
1answer
43 views

What are the formulas for these? [closed]

What are the formulas for the following? Overall increase given the percentages: a, b, c, d Future value of a one-time deposit given the amount of the one time deposit, APR, length of time, and ...
0
votes
1answer
178 views

How can I get more interest than the 2.8% my bank is offering me on my $60,000 AUD? [closed]

I have recently been given a $60,000 AUD for the deposit on a house. I have since discovered that I am not earning enough to get a good enough mortgate. I think if I wait a couple of years I'll be ...
3
votes
2answers
115 views

How does inflation rate affect debt payoff strategy?

When reading a comment by user Philipp on this answer, he states: [W]hen the debt is in a currency which has an average inflation rate larger than the interest [in this case 0%], you essentially ...
10
votes
3answers
173 views

What exactly is the interest rate that the Fed is going to adjust?

Lately, the financial press talks non-stop about the Fed doing this and that to the interest rate. What exactly is this interest rate that the financial press is talking about? Why is this Fed ...
2
votes
1answer
142 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, ...
1
vote
1answer
47 views

Determining annual inflation rate from bimonthly cpi growth rate?

I've been unable to find a concrete answer to this question so I assume I am overlooking something incredibly simple. In order to determine the real interest rate, I am required to use the nominal ...
1
vote
1answer
81 views

If/When the Fed raises the interest rate, how much will this affect my ARM?

I have a home equity line of credit with an adjustable rate. Currently (as it has been for quite some time), it's sitting at 3.5%. I understand that we're not sure how much interest rates will rise, ...
3
votes
1answer
431 views

Anyone have experience with Brink's 5% savings account?

If you get a Brinks prepaid MasterCard (no initial fees, and you can even get a $20 signup bonus) and go through some other gyrations, you can presumably get access to a 5% FDIC-insured savings ...
0
votes
1answer
61 views

Will interest rates on bank deposits ever fall close to 0 percent in India? [closed]

I wanted to know if interest rates will ever fall to close to 0 percent in India. + I would like to know that as close to 0 interest rates might affect the income earned through debt instruments at ...
0
votes
2answers
108 views

Savings account with fixed interest or not?

Me and my wife are renting our apartment and we're both students with part time jobs. We are saving up for a condo more suitable to our needs, we would like to have our down payment within five years. ...
1
vote
1answer
89 views

Strategy to save the most on interest

I'm planning on applying for a credit card that offers 0% APR on balance transfers for 15 months and $0 balance transfer fees. I'm thinking on using this card to pay down some of my student loans. ...
0
votes
1answer
90 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 ...
0
votes
1answer
103 views

Shouldn't nominal interest rates be illegal? [closed]

First of all, I'm really new to anything related to financial math and the like, but I just can't get my head around these nominal interest rates. The way I'm getting it is that it's just a euphemism ...