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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Option Volatility and Pricing : value of a stock option will also depend on whether a trader has a long or short stock position
Book: Option Volatility and Pricing
Chapter: Risk Measurement I
Topic: Change in interest rates can affect options
The value of a stock option will also depend on whether a trader has a long or short ...
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Can buying mortgage points reduce a rate below the applicable federal rate?
And if that is possible how does this prevent the bank from avoiding paying imputed interest. Additionally could points be purchased to bring a rate to zero or a negative number?
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Should I pay the current balance or the remaining statement balance to avoid paying interest on my US credit card? [duplicate]
I have a credit card. I used it to make a few payments. In my account, I see:
If I want to avoid paying any interest or late fees, do I have to pay the current balance or the remaining statement ...
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How to calculate how much more paying off a loan with extra principal payments saves vs extra payments?
So I recently wrote my loan provider on whether the extra online payments I was making were applied directly to principal and it turns out they were not, they were just treating it like extra pre-...
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How to combine compound interest formula with inflation?
Given a compound interest formula for an investment of FV = PV(1 + r/n)^nt, with a different APR for each year and a timeline of 2.5 years, how could this be combined with an inflation formula of R = (...
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If interest rates remain the same, what effect would this have on long term treasuries?
I'm interested in gambling a few thousand on TMF, a triple-leveraged 20+ year bond fund. It tracks the daily returns of the ICE US Treasury 20+ Year Bond Index.
If the Fed neither raises nor lowers ...
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Should I pay off mortgage or invest in CD?
I am confused about the mortgage rates in APR vs CD rates that I could invest in [US].
I have a mortgage loan that I got with 2.875 APR. I could pay that off or invest that money in a CD with rate of ...
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Varying interest charges on car loan
I am making my $386 a month car loan payments each month on time. I just looked at the payment history and the amounts of principal and interest vary widely each month.
For example:
October: Balance ...
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What is facilitiy fee in islam
Ethio telecom offer credit to his customer with rate of facility fee repayed at fixed date and also fee with daily charge. Is there a diffrence between the two term mean facility fee(service charge) ...
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Can I carry forward investment interest expense even if I take the standard deduction? [duplicate]
On IRS 2022 Form 1040, if I take the standard deduction, I don’t think I’m allowed to deduct investment interest expense on Schedule A, line 9, but can I still file Form 4952 to report any disallowed ...
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How do I know if selling equity is better or not in this problem?
In this exemplar situation, how do I know if selling my equity is better nor?
Situation: I have a small business which I am a 50% owner of. The business is currently worth $6,000,000 and is making $...
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How do I calculate the interest rate on my Treasury bill given an evaluated price?
Ex: I'm looking at the 3 month (13-week) Treasury bill here, maturing 11/16/2023. The evaluated price is 98.617417.
So is the interest rate:
(100 - 98.617417)/98.617417 * (365/(13 * 7)) * 100 = 5....
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Why is there no double rollover interest for forex trades carried overnight on Thursdays?
Why is there no double rollover interest for forex trades carried overnight on Thursdays? I have been looking everywhere to find an answer to this question, and finding absolutely nothing. I'd ...
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How can the purchase cost of a treasury bill be more than its face value?
I'm considering (non-competitively) purchasing a 52-week Treasury bill through Treasury Direct. As I understand, the purchase price is reduced by the discount rate and therefore is always less than ...
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When is interest incurred while trading on margin deductible in Canada?
To clarify my understanding of margin loans in Canada: the interest expense incurred while trading on margin is deductible, as long as the stock pays dividends, right? Also, if it is deductible, would ...
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Is there any advantage to a longer term CD that has a lower interest rate than a shorter term CD?
From what I understand, long term certificates of deposit (CDs) typically offer higher interest rates than short term CDs. They do that to give you a reason to lock up your money for a longer period ...
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Thursday morning open interest data for newly listed weekly options
The open interest data is available for the newly listed weekly options during the market hours on Thursdays. Yet the open interest data supposedly gets updated once per day after the market close. ...
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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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