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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88 views

Interest Earned on Cash [on hold]

I am doing a FCF (Free Cash Flow) and subtracting the after-tax Interest Earned on Cash at the end. I am trying to calculate the Interest earned on cash which equals = Interest rate on cash * Average ...
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4answers
205 views

How to calculate total interest payments for debt with two interest rates?

If a debt accrues interest at an annual rate of 8% on the principal balance up to $1,500, and it accrues interest at an annual rate of 18% on the portion of the principal balance above $1,500, and if ...
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1answer
51 views

How to benefit from different forward rates

This is an exam question that I cannot answer using my textbook so I came to this site for help: Assume that I can buy a 2, 2 forward rate of 11% at the stock market, that is in two years I can ...
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1answer
86 views

How is Barclays Everyday Saver interest rate calculated

I searched online and they said it's 0.25%-0.30% per year. But since my balance is ever-changing, how do they really calculate the interest? Do they just snapshot your balance on a certain day of a ...
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4answers
226 views

Do extra mortgage payments typically go directly towards principal?

I have a 30 year mortgage and I'd like to make extra payments each month to speed up the amortization schedule. I thought this would be better than taking out a 15 year mortgage as it gives me some ...
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2answers
178 views

Student loans w/ employer contribution payoff strategy

I have $17k in student loans (4 of them, all Stafford less than 4.5%). My monthly minimum payment is under $200, and my employer contributes exactly $200 on my loans each month (regardless of minimum ...
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1answer
70 views

Can my student loan interest apply for an above-the-line deduction when I'm on my grace period?

I was reading this article on 2019 tax deductions: https://www.fool.com/taxes/2019/01/13/your-2019-guide-to-tax-deductions.aspx I recently graduated college in May and started work in July 1st. I ...
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3answers
107 views

Hypothetical Question About Mortgage and Yield [closed]

Making These Assumptions: I have $1M, I want to buy a house which costs $1.5M. I want to have a mortgage of $500K. The interest rate on my mortgage is 2.5% annually. Assuming I rent the house and ...
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7answers
376 views

Advice on loan to friend

I am writing up a legal document (USA, Michigan) for loaning 7k to a friend with 10% APR with a term length of 5 years. (known him 5 years, he has paid back many smaller loans before). We'll both ...
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2answers
229 views

Why do so many people calculate an annual average return of 10% in stocks when multiple banks offer funds that yield only 3-5% or lower?

In recent months, multiple banks and financial advisers have asked me if I would be interested in investing in stocks because I have some spare money. They showed me different funds that they thought ...
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4answers
835 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 ...
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2answers
60 views

Profitability of Holding a Loan from Issue to Maturity

The loans that I invest in pay a fixed amount of money per month. A portion of it is principal and another portion of it is interest. As the loan matures, a smaller proportion of each payment is ...
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3answers
24k views

Can I negotiate to have a credit card interest fee waived?

I recently missed a credit card payment by one day (my first one ever in my history of credit starting from over 10 years ago), and I called the credit card company to have the late fee waived. I ...
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1answer
34 views

How to calculate equivalent interest rate of gains with monthly contributions?

I started the year with a known amount of funds in my account and I make regular (assume equal) monthly payments into the account. I know how much my gain/interest for the year is. I believe the ...
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2answers
106 views

Help with a homework question calculating interest

Question : Imagine that you deposit $6,000 a year, starting one year from today, for four years into a savings account paying 6% per annum. (That is one deposit of $6,000 per year.) How much money ...
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1answer
181 views

Negative rates on government bonds

Take the german 10J-Bundesanleihe for example, as far as I know the rates for it went negative recently. Is there any incentive for private investors / or institutional ones to invest now into this ...
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1answer
133 views

Write off accrued interest from interest income

My mother purchased a US government bond maturing 2019/04/15. The purchase date was 2018/04/13, so there were 2 interest payments attributed to 2018 (2018/04/15 and 2018/10/15), but the interest ...
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1answer
1k views

Exact meaning of no prepayment penalty in installment loan

What exactly does the phrase "no prepayment penalty" mean? To illustrate, let's consider the following example: I borrow an installment loan of $1000 and it says that I need to pay $300 monthly for ...
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1answer
213 views

Should I pay taxes on additional money I received due to exchange rate?

Let's take the below example - I send $1000 to India NRE account when exchange rate is $1 = Rs. 70 Money in NRE account = $1000 x 70 = Rs. 70000 I keep that money in NRE account at 7% interest Rs. ...
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2answers
263 views

Will banks allow one spouse to get an auto loan to buy a car from the other spouse

My husband was in an accident with our family’s van so we have to buy a new one. The insurance is paying off our existing note in full. We have found a pre-owned van that we want to purchase as a ...
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1answer
60 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 ...
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1answer
58 views

When is margin interest charged?

Let's say that I have a margin account at a major broker like TD Ameritrade or Interactive Brokers. I am trying to calculate what my cost would be to use margin and I would also like to know when it ...
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1answer
679 views

How to understand the calculation of interest for credit cards?

From Wikipedia The general calculation formula most financial institutions use to determine the amount of interest to be charged is APR/100 x ADB/365 x number of days revolved. Take the annual ...
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2answers
148 views

Help on calculating credit card interest

Below is a summary of my current statement Apr 21 2019 - May 2019: The APR is 25.24% I had a promotional 0% APR till Apr 20. This is it google drive link I have tried my best to calculate the ...
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2answers
2k views

How to recalculate an amortization table after making a large payment?

I have an auto loan I wish to apply a very large amount to. I have a amortization table that shows me details for each payment I make. Here's where it gets complicated... My lender does not allow ...
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4answers
496 views

If Turkey doesn't go bankrupt, is there any chance they won't pay bonds profits?

Suppose I buy 5000$ worth of Turkish treasury bonds today and the yearly interest rate for 1Y bonds is roughly 25%. Assuming Turkey doesn't go bankrupt in the next year, is there any chance I won't ...
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1answer
3k views

How do brokerage firms make money?

I know that this question has been hinted at on other open question sites like Quora but I have yet to find anyone who lists all of the points in one place. I understand that firms make money by: ...
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2answers
149 views

Excel table to compute interest on savings account that is compounded daily but paid monthly?

I have an excel sheet that represents a real world savings account which interest is compounded daily but paid out monthly. It looks like: Example Table For clarity, I will call each row in the "...
2
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2answers
120 views

How much do I need to save per month in an interest-bearing account to reach a certain account balance in a certain number of years?

How do I calculate what my monthly contribution should be to an interest bearing account, knowing how much I'll need to have in the account in a given number of years? For Example, I need $8,203.03 ...
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3answers
7k views

Frequency of investments to maximise returns (and minimise fees)

If I have a certain amount of money to invest regularly, how do I calculate the amount to let accumulate in my bank before I make that investment, assuming there is a fee associated with each ...
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1answer
32 views

Schedule C: Determine credit card interests expenses, line 16

How does one calculate credit card interest for schedule C, line 16? My wife has a home business and uses a credit card for the business. My understanding is that because we are using the cash ...
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1answer
54 views

Multiple day ACH transfer - is there a day when neither bank is paying interest?

If I transfer money from my account at bank A to my account at bank B, using a free multi-day ACH transfer, is it common that I would not be paid daily interest for the balance while the transfer ...
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1answer
114 views

When to make Credit Card payments on large balance with interest

Consider the following scenario: A credit card has a balance of $5000 that cannot be paid off at this time. Every week I earn $500 that is deposited to my bank. My monthly minimum payment is $200. ...
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1answer
122 views

Can the CRA peek into the amount of a Canadian bank account forthwith?

I mean without any search warrants or court orders. I ask because for the 2018 tax year, my brother in Grade 12 earned a total income of $500 CAD from only interest. The bank issued a T5 statement ...
2
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1answer
177 views

Relationship between down payment and mortgage interest

I just got a new job in a new city in Ohio (United States), and my partner and I want to buy a home roughly a year from now. We have a year to save up, and I am making a financial model to look at the ...
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1answer
86 views

How to calculate value of paying down mortgage and removing PMI vs higher interest debts?

How do I calculate which of these is more advantageous to do with a windfall?: pay down my mortgage to the point where PMI will be removed pay off a higher interest loan Assume the amount required ...
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0answers
33 views

Computing risk-neutral probability of spot rates

I am trying to use a binomial model to price options wtih bonds as the underlying security.If the current term structure is flat at 6%, but next year, I assume the one-year spot rate will be either 5% ...
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2answers
28k views

How do I calculate monthly compound interest in Google Sheets?

I have a financial spreadsheet with a column of all my deposits into my savings account. The leftmost column lists the dates of the deposits. Now, let's say my savings balance is $100.00 and my ...
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5answers
2k views

Why doesn't the U.S. government pay interest on tax withholding returned via a refund?

When the US government pays you your tax refund, it doesn't include any sort of interest payment for what is essentially a loan to the government. Why doesn't the government pay interest?
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3answers
267 views

Effective Rate for this balloon payment

Need some help on this calculation: Loan Amount: $377100 Down payment: $41900 Monthly payment: $5998 Balloon payment at the end: $206540 Tenor: 36 months I want to know how to calculate ...
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1answer
103 views

Calculating Interest Paid for Federal Deduction on a UK Student Loan

My spouse has a UK student loan. The loan has a 1.5% interest rate, and you only start repayments once you earn over a certain threshold. They do a calculation of how much you need to repay which I ...
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3answers
987 views

Why UK bank charges are not taken account when looking on interest for taxation?

In UK when filling-in self-assessment, HMRC is asking for amount of interest received during the tax year. But bank charges are not taken into account. See example here: my bank charges me £5 ever ...
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3answers
278 views

I have 25,000 in savings and I want to invest, but I don't know where to start [duplicate]

I've been collecting information about the best investment practices, however I'm have very little financial knowledge and was hoping someone here could point me in the right direction. I feel like I ...
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2answers
430 views

interest compounded daily vs monthly

I want to compare two saving accounts with same APY, but one has interest "compounded daily and credited monthly" and the other has interest "compounded monthly and credited monthly". Which will yield ...
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3answers
466 views

Balancing an Interest Accrual Rate Between multiple loans

Tags: multiple student loans , balancing interest accruals , student loan help
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4answers
3k views

Should I file my taxes? No income, unemployed, but paid 2k in student loan interest

This question is hypothetical. I was unemployed for the entire year of 2018 and had no income. I lived with a parent and had enough savings from a previous job to pay for myself and make all of my ...
41
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10answers
19k 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 ...
2
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3answers
366 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 ...
3
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1answer
218 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
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3answers
327 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 ...