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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.

3
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1answer
200 views

Not entering info on tax return

My wife and I make too much to get any deduction for our student loan interest. Our situation also puts us in the Standard Deduction, and we arent itemizing. Question is, do I need to enter all our ...
2
votes
3answers
224 views

Please help me calculate interest on a loan

My Ex owes me $66000 and I need to give him a payment plan with 8% interest over 5 years. The monthly repayments need to tier roughly as follows (he's going to earn more in the 2nd and 3rd years and ...
2
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0answers
98 views

Why does total interest paid per year increase as I pay down my loan (fixed rate loan)

I have a house loan at a 4.25% fixed APR rate with CitiMortgage. Comparing the total amount of interest I've paid recently, per Citibank's statement I paid $6684 in interest during year one of the ...
2
votes
3answers
247 views

What happens to interest already paid if I re-finance a 30-year mortgage to 25 years? 15?

I assume the interest amount I'm currently paying for my 30-year mortgage is based on a 30-year amortization trajectory. If I refinance to 25 years, or even 15, what happens to the interest I've ...
1
vote
1answer
119 views

Why should I pay tax throughout the year?

I do not have much of regular employment, I work shifts for various employers, so it is up to me how much I earn. However, typically the amount of work I do results in me earning about 550k NOK per ...
2
votes
2answers
88 views

Are there any catches to no penalty CDs?

My bank offers a a 2.25% savings account. They also offer a 2.35% no penalty CD. This sounds like a straight upgrade with no downsides (ignoring a 7 day minimum holding period). This sounds too good ...
2
votes
1answer
70 views

Intelligent Investor Example from Chapter 1

As per Intelligent Investor Chapter 1 example In 1965 the investor could obtain about 4½% on high-grade taxable bonds and 3¼% on good tax-free bonds. The dividend return on leading common stocks (...
0
votes
1answer
35 views

Tax system on savings account in India

I would like to know if the money in the bank is taxable. Let's say I have deposited some x amount in my savings account and the yearly interest is y amount. I know that this y amount is taxable, but ...
4
votes
2answers
105 views

1099-INT shows '0' even though I received some interest

Throughout the year I see little additions to my checking account for interest. These are pretty small. When I received my 1099-INT, all values were $0.00. Is this a mistake, or did I just receive ...
1
vote
0answers
84 views

After checking a tax audit, Massachusetts is owing me some money: what interest should I claim?

I got audited by the state of Massachusetts, USA, due to a mistake I did when filing my 2015 Form 1 (mirror). The audit's conclusion was that I have to pay some amount to Massachusetts, which includes ...
1
vote
2answers
91 views

Does it matter if my 1099-INT lists an out-of-date home address?

My 1099-INT lists an older address. I checked my bank account, and my address is up to date, but since I moved last year, I guess they kept the old address on the form. My tax filing software lists ...
40
votes
10answers
17k views

Why would anyone buy U.S. Treasury Bills?

From the Treasury Direct website, I saw this Bills: U.S. Treasury Bills are a type of short-term security of one year or less, usually issued at a discount. The discount is the amount the security ...
3
votes
2answers
159 views

How best to apply back Student Loan Refund?

After completing Undergrad December 2017 I began making payments on my student loans (#1-5 below), paying more than necessary on the smallest balance of my 6.8% loans (usually owe $340, paying $500). ...
5
votes
4answers
382 views

Is home equity worth taking out a mortgage when I have $67k student loans to pay?

Note: home equity isn't the only reason I'm thinking about buying. I'd like to have control over my own living environment, more space, not have to worry about annoying the apartment unit upstairs if ...
0
votes
2answers
213 views

Are you out of pocket if moving before paying mortgage interest?

Please could somebody clarify the following scenario for me (first time buyer)? Are there any tips? Any differences if moving from one lender to another? Supposing I take out a 25 year mortgage on a £...
0
votes
2answers
181 views

How are micro-finance banks able to offer interest rates so much higher than traditional banks?

Recently while browsing on google I came to know that there are few small-finance banks which offer great returns with the high amount of interest rate up to 7% and fixed deposits up to 9-9.5%. like ...
2
votes
2answers
201 views

Effective Interest Rate Interpretation

Assume a $1,000 loan for 24 months, with monthly interest rate 2.5%, and monthly payments ($55.91 as calculated by any online tool, e.g. here). This will give us annual interest rate (air) of 30%, ...
3
votes
2answers
75 views

Filing a tax return due to US bank interest for non-US persons

Does the mere ownership of a US bank account that earns some interest require a non US person (say, based in Europe, EU in particular) to file a US tax return? Are there any other reporting ...
4
votes
4answers
2k views

Do pension pots get interest? [closed]

Pension pot is the money, the employee and sometimes the employer and the government pay that gets accumulated into pension fund. But my question is, that this pension fund is basically a bank ...
0
votes
1answer
77 views

Simple Interest calculation on rent of specific period till date of payment

Hi I have to calculate simple interest on Rent of Rs.10,000 @6%. There are two parts to my problem. Calculation of simple interest on rent amounts due for 41 months progressively i.e. as rents keep ...
3
votes
3answers
176 views

How to know how much money was paid, and how much was spent paying off interest

I would like to buy a car, and found out about the 20/4/10 rule today. I definitely have more than 20% downpayment saved up, due to that I am not concerned with the 20 part. I am more concerned about ...
-1
votes
1answer
1k views

Minimum Nest Egg in Today's Dollars? [closed]

As a follow-on to this question, if you wanted to have a $2.5 million nest egg in 20 years, what would the nest egg value have to be today (assuming no future contributions)? Assume: 20 years ...
31
votes
8answers
5k views

Paying Off Principal of Home vs. Investing In Mutual Fund

I close on my first home October 21. I've locked in a 4.330% APR on a 30-year fixed conventional mortgage and my payment will be ~$800/month. I've put the required 20% down to avoid paying PMI. ...
1
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2answers
242 views

APR without principal repayment?

I've been trying to find out about this own my own but can't seem to work it out via search engines, loan/mortgage websites and excel. When I try to work out how much a loan costs, rates like APR ...
3
votes
4answers
754 views

How can a 'saver' maintain or increase wealth in low interest rate economy?

If low interest rates disadvantage 'savers' what are they supposed to do if they are not inclined to buy and spend? Where should you put your money (instead of it stagnating in low interest rate ...
3
votes
2answers
14k views

does interest payment on loan stay the same if I pay early

Hopefully, my question doesn't sound dumb, because I'm not a finance guy. Suppose I have a 100k loan, and the monthly payment is 1k. My loan payment goes 600 to interest and 400 to pay down ...
-1
votes
1answer
61 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 ...
1
vote
1answer
42 views

Effect of FED/ECB interest rate on EUR/USD exchange ratio

In 2016, the ECB has lowered interest rate to 0%. Some people assume that within the next few years, the ECB will increase the interest rate. How would that most probably affect the EUR/USD exchange ...
1
vote
1answer
377 views

Minimum Required Nest Egg Formula?

As a follow-up to this question, what is the minimum size of a nest egg to support 30 years of $5,583.33 monthly distributions? I want the $5,583.33 to increase with inflation each month. The ...
1
vote
1answer
101 views

Do mortgage offset accounts typically accrue interest at high balances?

Say someone has a 100% offset account on their mortgage. This means that if they have: Loan amount: $150k Offset balance: $100k ...then their interest is computed as if they only owe $50k on the ...
1
vote
3answers
316 views

Does IRS charge interest for underpaid taxes?

There is a rule that if no taxes are owed on last year's tax return, the IRS will not impose a penalty, but will interest be charged? Example: assume no federal taxes have been withheld during 2018. ...
1
vote
1answer
123 views

Best way to allocate money? Mutual Fund VS Student Loan

I am a 21 year old Canadian who is employed full time. I have no wife or kids nor do I own any property. I have no type of savings set up (investments, CPP, etc.). Each month I have 400$ leftover ...
2
votes
1answer
920 views

Should I pay extra towards my mortgage or HELOC?

My first mortgage has a balance of $147k with 4.75% fixed interest rate. My home equity line of credit (HELOC) has a balance of $87k with prime minus 1.1%. I've been making about $50 extra payment ...
10
votes
1answer
6k views

Why are my auto loan payments calculated differently than my mortgage payments?

Last year I got a home loan that follows the standard Rule of 78s amortization schedule. I can easily predict how much of my mortgage payment will go to interest and how much to principal. A few ...
2
votes
3answers
290 views

Why would a lender raise interest rates if you are in danger of not being able to pay your loan?

This is a follow-up to this question. It is established that lenders charge higher interest rates to customers less likely to be able to repay their loan in full, but this increased rate shouldn't ...
4
votes
4answers
4k views

How does compound interest work with stocks? [duplicate]

I just learned about compound interest, and I want to know if I understood it right: You buy a stock, and then you just keep it. And over time, you will just earn interest on your interest. Is that ...
3
votes
3answers
2k views

Is interest on a personal loan tax deductible?

My father loaned me money to invest in a company and the company pays me quarterly profits. I have to pay back the loan to my father plus interest. What I would like to know is whether or not the ...
0
votes
1answer
104 views

Minimum interest needed to keep money at same value with 4% inflation?

For 30 years, my calculation says 7.17%, which just doesn't seem right. Say you invest $1 each year for 30 years with a return of investment of 7.17% Total investment from your end = $ 3 Total ...
0
votes
1answer
230 views

How should you calculate the average daily return on an investment based on a history of gains?

I started an Acorns account several months ago to use as a glorified savings account. I don't make contributions on purchases, but I contribute 10% of my paycheck to it every two weeks (Richest Man ...
9
votes
2answers
3k views

Can I save money on interest by paying a loan multiple times per month?

I'm paying off a student loan right now that accrues interest on a daily basis. Last month, for example, I got a bill where the principal was $25k and the interest was $150. I pay about $500 each ...
57
votes
10answers
13k views

Why don't bond makers just get loans?

I was just looking at investment opportunities, and I found a number of places offering bonds paying up to 12% interest over two years. My first thought was, I can get a loan from my bank for 5% ...
2
votes
1answer
82 views

Comparing bank to bond ETF

Let's say I have a bank savings account giving this interest: Rate: 1.736% APY: 1.75% (rate accounting for compounding interest) And there's a bond ETF SCHZ with these rates: TTM: Distribution ...
1
vote
1answer
101 views

How do you calculate a monthly loan payment when using Actual/365 or Act/Act day count convention?

It is pretty easy to figure out a monthly loan payment based on the standard formula, when using a 30/360 method, because the monthly interest rate is always the same since each month has 30 days. ...
2
votes
1answer
94 views

Are longer or shorter term CDs preferable while interest rates rise?

As of August in 2018, everything I'm reading is projecting rising interest rates for a while. Assuming that this is what happens, is it better to deposit money into a shorter-term CD (at a lower ...
0
votes
1answer
35 views

Interest on community shares - tax return

I invested in a community project under the Seed Enterprise Investment Scheme. In the year I invested I claimed SEIS tax relief on the investment. In return for my investment I received shares in the ...
1
vote
1answer
91 views

How many days of interest do I lose if I make a wire transfer from one bank to another?

I suppose this will depend on the banks, so what's typical? Do any banks do this in 0 days? What's the longest which would still be allowed by law? Both bank accounts are already established and in ...
27
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7answers
12k views

Why is the fractional-reserve banking not a Ponzi scheme? [closed]

Operating a Ponzi scheme is a crime which I suppose has some sort of definition in the penal code or criminal law. It is a fraudulent investment operation that pays returns to separate investors from ...
2
votes
1answer
50 views

How to Aggregate APR

I currently have several different credit accounts with balances that need to be paid off, and I am considering consolidating these accounts into a single loan account. These accounts each have ...
6
votes
3answers
1k views

Will having a secondary signee with bad credit on a mortgage raise or lower interest?

My girlfriend and I are purchasing a house. We were told that it would be better to have the mortgage solely in my name as the only account holder due to her credit score. My question is, between ...
0
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0answers
27 views

Is there any way to compare a tracker's interest with an average fixed rate?

I have been paying into a tax free index tracking account for a number of years, the amounts were only occasionally regular and varying in size. I haven't withdrawn anything. I have exported data ...