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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How can I see where banks invest their money? [closed]

I'm planning to open a new savings account and want to strike a balance between a good interest rate and the bank's ethical practices. I've found a tool which has that kind of data about American ...
Matt's user avatar
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1 answer
92 views

Which loan would be most cost-effective to service first?

I'm currently the debtor of two loans: $620,000 CLP at 0.99% monthly interest, to be paid over 12 equal monthly instalments, starting this month. $180,000 CLP at 0% interest, but adjusted by ...
ppp's user avatar
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1 answer
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Does checking "A portion of these dividends is U.S. Government interest." matter when filing tax in Washington state?

I'm filing my taxes in the US since I reside in WA state and I'm being asked by TurboTax whether a portion of these dividends is U.S. Government interest: Does checking "A portion of these ...
Franck Dernoncourt's user avatar
0 votes
1 answer
31 views

Calculating non-exempt interest for California income tax

This question is about how California taxes interest on municipal bonds that are exempt from federal income tax. I live in California. In 2023 year I received tax-exempt interest from a variety of ...
octern's user avatar
  • 143
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1 answer
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1099-int concern, tax filing

My credit union issued me a 1099-int for savings bonds that were cashed in 2023. Is it correct to say that box 3 of the 1099-int be the total of the interest earned plus half the face value of the ...
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4 votes
2 answers
168 views

How to calculate monthly payment of a loan

I am trying to solve this question: Your brother-in-law asks you to lend him $100,000 as a second mortgage on his vacation home. He promises to make level monthly payments for 10 years, 120 payments ...
Zeeg's user avatar
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0 answers
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Wise cash balance interest program and NY state residents

Why is it that the cash balance program (and consequent FDIC insurance) that Wise offers its customers is not available to residents of New York State? Is there any way around this?
Tim Cowlishaw's user avatar
11 votes
5 answers
5k views

Is exceeding the U.K. Personal Savings Allowance - and being taxed - a bad move?

I’m based in the U.K. and in 2022 inherited approx £370k I did not have any debts, except a mortgage on my main and only home, which I paid off in full. I made use of my full £20k ISA limit over the ...
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0 votes
1 answer
42 views

Present value of an annuity by formula and calculator different

I'm having some issues understanding how TVM calculators as compared to the present value formula works, they should give the same result but they don't. The questions is: Suppose you are considering ...
fluter's user avatar
  • 113
6 votes
4 answers
3k views

How exactly does a biweekly payment schedule on your mortgage reduce the amount of overall interest paid over the life of the loan?

Here is how a normal fixed-rate monthly amortization schedule is calculated: First we determine the total monthly payment: Payment = [P*(r / n)(1 + r / n)^nt] / [(1 + r / n)^n*t - 1] where n = 12, P ...
Nova's user avatar
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2 votes
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Can you withdraw capital gains from a stock sale and still deduct interest on the original cost basis?

Say you borrow 50k and buy 100k of shares. Then the stock rises to 100k You sell half and cancel out the loan, but also have 50k of capital gains. If you withdraw the 50k gain to maintain the original ...
Mike Hampel's user avatar
1 vote
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Questions regarding Adjusted Gross Incomes and their calculation

I was recently asked to provide my AGI by a governmental service outside my country and was wondering about its calculation, since Indian Tax Returns (ITRs) don't have a specific header for it. Should ...
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3 votes
1 answer
109 views

Apportionment of buy-to-let mortgage interest

I live in the UK and am a higher rate taxpayer (40%). If I have a buy-to-let property, I understand I can claim mortgage interest relief at 20%. Effectively I can only use half the interest as an ...
James James's user avatar
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59 views

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 ...
user126526's user avatar
0 votes
1 answer
91 views

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?
CodeCamper's user avatar
-2 votes
1 answer
516 views

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 ...
Franck Dernoncourt's user avatar
1 vote
1 answer
272 views

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-...
Nona's user avatar
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1 vote
2 answers
141 views

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 = (...
user125687's user avatar
1 vote
1 answer
1k views

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 ...
Enter4343's user avatar
12 votes
5 answers
6k views

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 ...
zadane's user avatar
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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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3 votes
2 answers
294 views

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) ...
Musa Suleyman's user avatar
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0 answers
28 views

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 ...
ma11hew28's user avatar
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1 answer
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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 $...
daf8u3fk's user avatar
1 vote
1 answer
1k views

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....
JJ S's user avatar
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0 answers
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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 ...
kcardinalis's user avatar
3 votes
1 answer
2k views

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 ...
josh's user avatar
  • 153
1 vote
1 answer
220 views

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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10 votes
2 answers
4k views

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 ...
7529's user avatar
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0 votes
0 answers
15 views

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. ...
JesusMaria's user avatar
0 votes
4 answers
224 views

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 ...
simplemind's user avatar
2 votes
1 answer
112 views

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 ...
obick's user avatar
  • 21
0 votes
1 answer
274 views

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
xqwxeqwex's user avatar
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0 answers
706 views

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 ...
pf_init_js's user avatar
1 vote
1 answer
115 views

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)^...
RajS's user avatar
  • 173
0 votes
1 answer
69 views

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 ...
Nicholas's user avatar
  • 2,871
0 votes
1 answer
89 views

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 ...
Stan Shunpike's user avatar
0 votes
1 answer
51 views

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 ...
personal_cloud's user avatar
1 vote
1 answer
216 views

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 ...
imahodophile's user avatar
1 vote
2 answers
110 views

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 ...
heretoinfinity's user avatar
1 vote
2 answers
418 views

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 ...
parsley72's user avatar
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0 votes
0 answers
113 views

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 ...
flashy_thingy's user avatar
1 vote
1 answer
169 views

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 ...
Franck Dernoncourt's user avatar
15 votes
3 answers
6k views

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 ...
asb1230's user avatar
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0 votes
0 answers
28 views

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:
XcellentEEE's user avatar
3 votes
1 answer
152 views

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?
Bananach's user avatar
  • 275
18 votes
6 answers
4k views

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 ...
gerrit's user avatar
  • 3,213
1 vote
1 answer
484 views

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 ...
Joe.E's user avatar
  • 6,070
0 votes
1 answer
291 views

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 ...
Danny Delott's user avatar
2 votes
1 answer
952 views

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 ...
Justin Schroeder's user avatar

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