Questions tagged [interest]
for questions that relate to interest. Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets.
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Has the positive correlation of the stock market performance and the risk free interest rate at the time of buying shares been analyzed empirically? [closed]
From the answers to my earlier question I learned that the expected return on the stock market is positively correlated with the interest level at the beginning of the considered time period. The ...
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Does the expected return of a stock ETF depend on the current interest level? At which interest rate are stock ETFs no longer recommended?
Is there an interest rate such that there is no point in putting money into the stock market (e.g. in a stock ETF that models the stock market) but where the interest rates of almost risk-free ...
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How do I Calculate future monthly loan payments after interest-only period ends?
When I was in school, I was paying only interest on my Sallie Mae student loans. Now that I am graduated, my payments are made on the interest as well as principal. I am trying to calculate my monthly ...
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Why is the interest on EUR so much lower than USD?
https://www.interactivebrokers.com/en/accounts/fees/pricing-interest-rates.php
4.330% vs 2.245%
Difference isn't explained by the inflation difference
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How does HSAV ETF convert interest income into capital gains income? (canada)
I came across this ETF Fund from Horizons called HSAV, which invests the money across Canadian bank high interest savings accounts. Rather than redistribute interests like a money market fund, the ...
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Calculating CAGR for Ordinary annuity
Basic compounding interest question:
I paid 5000 every month for 12 months and got 67500 in return, what was the annual compounding intereset rate?
I considered formular as follows:
FV = PMT(((1+r)^...
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Is margin interest deductible in Pennsylvania
I am filing taxes for a family member and they have a sizable amount of investment income in 2021, as well as some margin interest. Both the internet and my tax software made it clear that I can ...
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Do student loans capitalize daily after the grace period?
As I understand it, for many student loans, when you take out the loan, there is a daily, fixed, simple interest that accrues. This accrues on the principal but does not capitalize. Therefore, if I am ...
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How to calculate imputed interest on options trades?
All interest income (including imputed interest) must go on 1040 line 2 taxable interest. For example, if the interest rate is 5%, then I can buy 100 T-Bills for $95 each. After 1 year I get $100 per ...
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Possible incorrect tax exemption on form 1042-s? Where to show 1042-s interest income on 1040?
I have interest income on 1042-s, but was exempt from tax. My Box 3a is "02" and 4a is "15".
"02" refers to - exempt under IRC (code should only be used if no other ...
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Additional principal payment split between interest and principal [duplicate]
I made an additional payment with my first mortgage payment but I noticed that although I designated the additional payment, say $10, as principal the remaining principal balance didn't go down by the ...
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Where do interest payments go?
I understand that in many countries the base interest rates is set by a central bank. They do this by changing the amount they charge for overnight loans to the large banks to cover transfers. But ...
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How to calculate monthly CPI on a private loan over a couple of years?
I have borrowed money from a family member, and I have been keeping track of exactly how much I owe them down to fractions of cents. The amount owed has been steadily growing by a couple of hundred ...
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How shall one take into account the accrued interest when purchasing a bond on the secondary market?
For example, I'm looking at the following US Treasury bonds ordered by decreasing yield to maturity (YTM) on Charles Schwab:
If I simply want to maximize the returns, assuming no default risk, should ...
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How does Robinhood’s cash sweep achieve 4% interest?
As of February 2023, Robinhood’s Brokerage Sweep Program guarantees its users 4.15% APY (for those who pay $5 a month for Robinhood Gold). Robinhood is sweeping the cash to banks. Do those banks offer ...
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How We Decide n in Compound Interest Rate Table When Annual Expenses Increasing After Certain Year?
I don't understand that, in this question's solution for HEPS9, why we take n as 6. And why we use A/G for SP240 and P/G for HEPS9.
Question:
Solution:
Compound Interest Rate Table:
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Do retail interest rates outpace inflation historically in the US?
Historically (say over the last 70 years), have interest rates (available to retail customers) beat inflation in the US?
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Inflation-linked bonds — what's the catch?
This the question Why is there a discrepancy between current inflation rate and I bond rate in the US? I have learned that, at least in the USA, there exist bonds where the yield is guaranteed to be ...
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When money is in transit in between banks, who gets the interest?
It can take up to 3 business days to transfer money between banks and it could be even worst if it's an overseas payment, if it's on a weekend or public holiday. Many thousands of dollars are ...
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How to calculate the APR on an investment?
I'm trying to boil this scenario down to an equation:
A token is worth $1.50. There is a total of 100 tokens invested. Last week, this investment earned $2 in interest.
Given this, how would I ...
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Is there a function/formula for the principal and interest lines in a mortgage graph?
When you use a mortgage calculator sometimes the results coming with a graph as well showing interest and principal paid every month. Image below...
Is there a formula/function that defines those ...
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Why offer at a lower interest rate on a loan then the expected ROI of investing in the stock market?
A quick google search told me that the expected ROI of investing in the stock market is roughly just under 10% That's admittedly a bit higher then I had anticipated, but quick scanning of their ...
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What would be a recommended interest rate for an unsecured loan to individuals with mediocre credit rating and income close to expenses?
I have a friend whose new wife is paying an absurdly high interest rate on her auto loan. They've asked if I was willing to loan them money at a more reasonable rate to pay off that loan and have ...
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Unusually inverted yield curve for time deposits
I found out the following time deposit rates of a bank:
I understand the meanings behind inverted yield curves. However, the rates seem very unusual to me: The 18-month rate is far lower than the 15-...
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Could anyone help me how much my profit would be in 5 years if I start at $1000 and they said it would have a 5% income each year? [duplicate]
If I am to earn 5% annually and I started with $1000, how much would I have after 5 years? Is it too good to be true?
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TreasuryDirect.gov not showing monthly interest gained on an I bond
I bought an I bond on treasurydirect.gov and it was filled on 10/1/2022 (more than 1 month ago at the time of writing). My understanding is that I bonds accrue interest monthly but when I login now it ...
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When will interest rates on savings accounts increase (UK) [closed]
Note: question related to UK savings accounts
4 days ago the Bank of England increased the bank rate from 2.25% to 3% which I understand will increase interest rates on mortgages and savings accounts ...
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Calculate Loan Balance and Future Balance with Extra Repayments
So, here's the current situation.
I took out a £7000 loan over 42 months at the insane interest rate of 47.4%.
I needed the loan, couldn't borrow it off family, and the interest rate is due to some ...
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Does a Treasury Note Pay Interest on the Maturity Date?
I'm looking for a clear example of Treasury Note interest payments. I've read this on the TreasuryDirect website:
Treasury notes pay interest on a semi-annual basis.
When a note matures, the ...
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Do mutual funds get interest on the cash positions in their portfolio?
I am writing a paper about mutual funds and I was wondering if mutual funds get paid interest on the cash positions they have in their portfolio. If so, what kind of rate would this be?
Do funds use e....
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If you pay off a variable APR daily accruing credit card before the end of the month, is there interest?
Can you avoid 100% of interest on a card that accrues interest daily, by paying it off in full before the end of each billing cycle?
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Is this simplistic interest rate used?
Suppose A is the initial investment, r is the interest rate (r > 0). The target interest rate model is then A(1 + r)^t, where t is the time since the moment at which the interest rate started to ...
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Compare Lloyds and Chase savings interest profit
So, Chase has a savings account for 1.5%. They calculate the 1.5% AER (1.49% gross) variable interest daily and pay it monthly.
Lloyds, on the other had 0.20% gross interest (no more info given in the ...
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Why are returns on term deposits so much higher in Canada (than in other countries)?
If one searches for GICs (Canadian equivalent of a term deposit) on the Canadian financial service comparison site ratehub.ca for 3 year deposits with 10 000 CAD as investment capital, one will come ...
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Why didn't including a 1099-INT figure change the bottom line in my tax return?
I prepared a tax return with Turbo and saved as pdf. Later, I discovered a 1099-INT I had neglected to include, so I edited the return to include it. But it did not change the amount of the refund. ...
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Is "buy now pay later" beneficial for consumer? (the four interest-free payments)
Recently, I listened to the podcast episode "Buy now, pay dearly" from Planet money about how companies offer an option to let you pay for a product with 4 interest-free payments.
They ...
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Does partial prepayment on interest only loans goes towards principal
I am applying for 30 year term, 7/1 ARM with 10 year interest only loan.
This is what I received from my lender:
My question:
During interest only period, if I make partial prepayments, does it ...
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Question about the investment calculator interest rate
I have a quick question question about this investment calculator.
It is the website calculator.net/investment calculator
Basically I put in my starting amount of investment is 4800, for 1 year, with ...
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How to report interest on uncashed savings bonds?
I have a Series EE U.S. savings bond that matured in 2018, but I still haven't redeemed it.
What do I put for the payer's name on 2018 Schedule B (Form 1040), line 1?
More details:
IRS Publication 550 ...
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Effective Interest Rate Calculation in Discounting
Quoting from "Numbers Guide" book by The Economist (sixth edition):
"An even bigger discrepancy occurs with discounting of interest on many personal or consumer
loans. For example, an ...
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Which days count when daily rate is used to calculate interest?
Say you get a loan on Jan 20 with monthly payments due 15th every month. You have the money in your hand some time in the middle of Jan 20 already, that’s the day when the contract came to existence. ...
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Where does the formula for terminal value come from?
I am a beginner investor and I had this doubt in DCF models of valuation.
Where does the formula for terminal value even come from? Like I have seen this video: https://www.youtube.com/watch?v=...
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Friend has 90k USD after a home sale, use it to buy a new home in new location or pay down med school loans?
I have a friend. He is an up-and-coming doctor. This means he has about $160k in student loans. The interest rate is about 6%. In a month or two he is selling his house. From this sale he will have ...
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How do I report interest income whose non-resident tax was not withheld?
I'm a former resident of Canada who kept their Canadian bank account upon leaving Canada several years ago. It seems that my bank either did not receive or did not act upon my change of address ...
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How does risk-free interest rate and interest rate differ on their impact on stock price?
According to investopedia: how interest rates affect stock market,
"Higher interest rates tend to negatively affect earnings and stock
prices (with the exception of the financial sector)."
...
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Time Value of Money — Interest Paid on Mortgage
You you bought a house worth $328,000. You paid 25% of the purchase price in cash and arranged a 25 year mortgage with a rate of 4.0% compounded semi-annually for the remaining balance. The mortgage ...
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A foreign exchange reserves
A foreign exchange reserves manager is indifferent between placing a deposit in a foreign bank account or paying $98 to purchase a $100 zero issued by an advanced country government that matures in ...
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How to prioritize paying back loans based on interest?
If I have a loan at 0% and can get a 7% return on my capital, then I wouldn't want to pay back that loan until the absolute last moment.
If I have a loan at 14% and can get 7% return on my capital, ...
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Accrued Interest Rate in times of Covid
I had about $3000 dollars in accrued interest prior to the Covid Forbearance period. I understand that there is no interest during this Forbearance period. I'm seeing that the accrued interest is $0 ...
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Calculating Total Interest on Loan
I have found some sites stating:
Principal * Annual-Interest-Rate * Term-Length-Years
... but this does not calculate the total interest paid correctly. This formula neglects a shrinking principal ...
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