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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0answers
35 views

Interest Rate and Present Value Question

I'm trying to answer the hypothetical question posted below (for educational purposes) but I'm very confused about its wording regarding the interest rate. If I assume that the interest is compounded ...
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1answer
44 views

Are all cryptocurrency exchanges and financial lending institutions required by U.S. law to provide a 1099 form to the investor?

I am currently thinking of putting up a portion of my crypto assets on a reputable cryptocurrency lending platform. I asked them if they provided a 1099-INT for the interest that I would earn on my ...
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1answer
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Calculate value of investment with variable interest + periodic payments (Excel/Google Sheets)

I know about FV and FVSCHEDULE but how do I combine them? Say I make monthly payments into an account with a variable interest rate ... how do I calculate future value? Or do I have to build out the ...
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3answers
204 views

What is a good starting point for a new investor?

Firstly to clarify, I am not looking for financial advice, I am trying to find out where is a reasonable starting point for someone who has no experience, some cash in an ISA and is risk averse. I've ...
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1answer
57 views

Unpaid accrual expenses [closed]

Let's say for-profit corporation ALPHA INC. borrowed $1M from person JOHN DOE, who is also an executive officer of the corporation. The corporation ALPHA INC. uses accrual accounting method, while ...
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0answers
66 views

How do you treat interest (both simple and compound) earned on cryptocurrencies?

Currently, on an exchange platform, I am pledging about 10 BCH (approx. $2800) which should earn interest p.a. of 8 % paid out every three months. The interest is paid in BCH, meaning that 8% of 10 ...
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2answers
55 views

Should I focus on repaying private or federal student loans during Covid-19 and CARES act?

The CARES act puts the interest rate for federal student loans at 0% until December 30th and there are no mandatory payments for student loans until that time. I owe $32,000 in federal loans, normally ...
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4answers
266 views

Why do banks pay a compound interest on deposits instead of simple interest?

Why do banks pay a compound interest on deposits? Obviously they'd be better off paying a simple interest instead, which would still be attractive to their customers. However I figured that in such a ...
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2answers
312 views

Are there ways for me to generate $40k per year in perpetuity from $300k? [closed]

Why or why not? Even if I did get $40k once, how unlikely is it to happen again? Some obvious answer are getting a job paying $40k a year (reasonable, but not what I'm asking) and spending the ...
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1answer
92 views

An investor holding an 8% subordinated debenture will receive how much at maturity?

I came across this question in the Wiley Series 7 2020 book: An investor holding an 8% subordinated debenture will receive how much at maturity? a. $1,000 b. $1,080 c. $1,040 d. Depends on the ...
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5answers
2k views

How to separate interest paid on a credit card between personal and business expenses?

My wife has a home business selling clothes. She purchases all her inventory with a credit card but she also uses the card for personal expenses. I understand that on the IRS Shedule C, we can write ...
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2answers
102 views

Do I earn interest when shorting stocks?

Suppose I short 100 shares of a $5 stock. My cash balance will be +$500 due to the short position. Does this $500 earn any interest? I have heard two opposing answers: The $500 earns interest, and I ...
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1answer
70 views

Calculating interest and Principal Paid using TI-84

How do I calculate the net quantity of interest on a loan, and the net quantity of the principal on the loan, that I have paid off after a given number of payment periods in the finance app on a TI-84 ...
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1answer
65 views

Report interest to HMRC - less than personal savings allowance

[UK] Do I need to report to HMRC if I earn less than £1,000 (personal savings allowance (PSA) basic rate taxpayer) in interest? I also have CGT of less than £12,000.
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2answers
78 views

Compounding Interest

How to calculate compounding interest and maturity value of recurring deposit. e.g. Mr A deposit $ 1000 per month in bank @ 5% p.a. for 5 years. Interest compound quarterly. How t0 calculate maturity ...
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3answers
151 views

Does a bank look unfavorably on someone who pays off their credit card as soon as the introductory period ends?

I have a card for which I had a 0% intro period in which I carried a balance of around $10k, until the intro period ended. Then I paid it off in full so that I have a $0 balance - from $10k. I'm sure ...
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1answer
53 views

Can I renegotiate desirable rates and terms on a paid-off credit card?

I would like to keep and use my business credit card, but I do not need it. I paid off around $10k today which took my balance to zero, now that my 0% introductory rate has ended. (The card is around ...
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How to read/decipher the percent % in a bond's interest versus coupon rate question or example

I was studying about bonds, more so accreted/coupon bonds that were discounted. As far as I know and believe to be true is that when a question says: 1) Q. "Mr. Dancer purchases a 5-percent ...
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2answers
55 views

Find ending balance given return rate and amount added each year

If I have an investment that grows 10% per year, and every year I add an amount, is there a formula that can be used to find my ending balance after n years? The following demonstrates this: year 0: ...
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2answers
161 views

Using credit cards to pay personal loans

Personal loans issuers won't allow you to use a credit card to pay your loans. Is there a way around this? I have lots of credit card with good amount of remaining credits. And I have very high ...
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1answer
119 views

Daily interest calculation on a 30/360 basis, considering payment occurs before schedule — how-to in Excel?

I'm setting up a payment spreadsheet for a loan just granted, and want to be able to make daily calculations of accrued interest. The debtor has been given a payment schedule with an interest only ...
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1answer
25 views

Term Life Insurance premium vs Interest/Inflation rate

I am thinking of buying a term insurance plan for myself in India and am 28 years old. My premium per year to be paid for a period of 10 years and coverage till 99 years works out to be 111,213 INR. ...
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0answers
38 views

Cash Advance Interest

I understand cash advances accrue interest from the very second they're made, but I don't understand why my credit card company continues to charge me cash advance interest after I've paid my account ...
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1answer
133 views

How are banks able to offer high interest rates on foreign currency fixed deposits?

My bank offers foreign currency fixed deposits (FCFD) at a high rate of interest. What's the catch? I know how the bank earns money on domestic currency fixed deposits: by loaning out the money or ...
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0answers
47 views

How to calculate proceeds when buying stock with borrowed money?

Suppose I borrow money and use it to buy stock, expecting the stock price to raise short-term. HMRC provides clear instructions on futures and contracts-for-difference (CFDs), but none on custom ...
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1answer
74 views

Waiting for a refund that was approved 4 months ago. Company stalling and not getting back to me. Can I charge them interest on the sum they owe me?

As the title says, I booked a ticket with an airline (Condor Air) August, 2019. On December, 2019, I was granted a refund because their parent company went bankrupt and the airline stopped operating ...
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4answers
421 views

Doesn't the existence of FDIC incentivize savers to put their savings in the most risky bank?

The riskier something is, the more interest/coupon would be demanded by the lender. In the case of choosing where to put my savings, wouldn't the existence of FDIC incentivize searching for the bank ...
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0answers
74 views

Are owned stocks considered balance?

I want to start investing money into stocks and for that I was comparing depots (broker bank accounts?) I found one that seemed very interesting to me but when I checked their pricing I figured that ...
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6answers
17k views

What to do with $1,000,000.00 for 3&1/2 months?

We have 1 million dollars from the sale of a farm, which we want to use to pay down land debt. But we can't make a payment until the anniversary date of July 5. Right now it is in an interest ...
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1answer
81 views

What determines the interest rates of government bonds?

It's not clear to me how the interest rate of a specific government bond changes. I would like to make a comparison with cryptocurrency exchanges. Consider, for example, the price of bitcoin on ...
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1answer
150 views

Nonresident aliens do not need to pay tax on earned interest?

I am a nonresident alien living in the USA and paying federal and state taxes on my salary. I am working in a university in Colorado with a J1 visa which is valid from 06/24/2018. I have a social ...
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1answer
1k views

Calculation on Accrued Interest on typical student loan

I was reading an article on accrued interest as it pertains to student loans, and this is what was said: "Say you borrow $5,000 each year you’re in school at an interest rate of 5% each year. ...
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139 views

Spouse earns $50 K yearly, you $0. How much tax on joint HISA?

We both maxed out RRSP, TFSA. Each has 3.3% HISA at Laurentian Bank. We don't want deposit over $100 K, CDIC's coverage. No other CDIC institution pays 3.3%. We open a joint HISA — 2 below — and only ...
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3answers
213 views

Must I file Form 1099-INT for interest on a business loan from an individual?

The 2020 Instructions for Forms 1099-INT and 1099-OID says that "you are not required to file Form 1099-INT for interest on an obligation issued by an individual", but I don't understand what they ...
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1answer
92 views

Finance loan calculation [closed]

I was trying to do some maths in excel, I was able to calculate the amount I will be paying for a 40000USD loan at a 13.9% (7 years) based on amortised scheduled repayments with a constant interest ...
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2answers
318 views

$0.30 1099 tax form received, should I ignore it?

Context: I am not an US citizen nor do I live in the US (I live in Europe). 4 years ago, I was working in the US and had a bank account there. Then I moved to Europe in my home country. I have some ...
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0answers
113 views

How do I deal with taxes on a U.S. Savings Bond that matured a few years before it was redeemed?

My parents recently found a 30-year Savings Bond of mine that matured in 2016. I redeemed it at the bank in late 2019. My understanding is the correct way to handle this is to file an amended 2016 ...
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2answers
222 views

Credit cards: Is it worth using the interest-free period on a second card?

I am about to start a 12 month part-time course, requiring variable but monthly payments. To maximise my budget I want to pay for it via credit card, but am trying to understand which method will end ...
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3answers
2k views

How to calculate savings account interest if you deposit and withdraw irregularly?

It's easy to calculate interest on a fixed principal. If you have for example $1000 deposit on your savings account and the rate is 0.25% compounded every whatsoever and you want to know how much is ...
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1answer
114 views

How does one calculate the following loan problems? [closed]

1.) Calculate the total interest to be paid on the loan during it's lifetime. Compute for BOTH compound interest and simple interest models. Start Principal = $21,315.00, Date of Disbursement = 9/...
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1answer
143 views

What happens when I make a purchase on a credit card after the promotional purchase window but before interest is due?

Sorry for the poor question title. I couldn't think of a better way to word it. Suppose I have a credit card that offers a promotional no interest for 12 months on purchases made in the first 60 ...
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5answers
315 views

Why is interest paid on the outstanding amount instead of the whole amount of a loan?

For a large proportion of loans, why is interest paid on the outstanding amount instead of the entire amount of a loan? For example, for a 100.000 loan with a 10% interest, basic logic would imply ...
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1answer
133 views

How is interest calculated on a UK type 1 student loan?

On my student loan annual statement it says The Student Loan Company applied interest to my balance every month but only received one lump sum payment at the end of the year from HMRC, even though ...
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1answer
137 views

When I capitalize amortization table, the present value doesn't equal the sum of PV or the XNPV

How is it that when I capitalize an amortization table, the present value doesn't equal the sum of PV or the XNPV formula of all the future payments? If I capitalize the future payments with the same ...
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1answer
90 views

loan and interest rate [closed]

A loan payment of $4200 was due 3 months ago, and another payment of $1800 is due in 6 months from now. When should a single payment of 5800.00 be paid to settle the debt if interest is to be 2%?
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1answer
162 views

Does the concept of Fixed Deposit exist in the U.S. for foreign nationals?

There exists a pretty simple concept of Fixed Deposits in India where some banks pay up to 7% return per annum with a good deal of flexiblity. This is a good option for those who want to have a ...
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3answers
206 views

What is a reasonable percent of income used to pay interest on consumer debt?

I was looking at a breakdown of the Ontario government debt and 11% of tax dollars go to pay interest. I am interested to compare with personal finances, would 11% of annual income as interest be ...
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2answers
191 views

Does this scheme work for double-earning on stock market growth + high interest savings?

Suppose I have a high-interest savings account that earns 2% interest. Suppose also that the stock market will grow 5% per year. It seems you'd have to choose to divide your money between the two and ...
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3answers
220 views

When to schedule direct debits to maximise interest

Assuming my debit (current) account pays me interest on the funds that are in the account, my intuition is telling me that it makes sense to schedule direct debits for the day before I'm paid. This ...
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6answers
2k views

How does paying extra on my mortgage affect my amortization schedule?

I am a first time home buyer and have some spare cash after my home purchase to pay forward quite a bit of money (cash was not available during actual purchase, so, no, I could not have put it towards ...

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