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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.

6
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1answer
4k views

Cash Advance causes recurring interest fee after paid in full

In January I made a cash advance of $110 with my credit card. In Februaury, I paid off January's balance (+$10 cash advance fee +$1.82 cash advance interest) in full by the statement due date. This ...
4
votes
3answers
1k views

What are the pros and cons of buying an item on installments with zero percent interest?

For example, currently Verizon is advertising an iPhone 6s for either $649.99 or 24 monthly payments of $27.08, i.e., $649.92, which is essentially equal and there is no interest. The obvious ...
-1
votes
1answer
211 views

Proper etiquette for loans from friends [closed]

I'm not sure that there is a universally accepted "proper etiquette" when it comes to repaying a loan from a friend, but I feel it necessary to be absolutely fair in respect of the time value of money;...
1
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2answers
125 views

How to get interest earned from start of repayment to a specific date on a declining balance?

I need a formula in getting the interest earned from start of payment of my loan to a specific date. I know the formula for the current due interest, which my company have given me in excel: days = ...
3
votes
2answers
648 views

How to calculate multiple debt payments with additional lump sum and varying additional monthly payments

I'm attempting to create a calculator that I can use to try different debt repayment scenarios. If I have multiple debts with different rates I'm wondering what algorithm to use to figure out how long ...
4
votes
1answer
142 views

The penalty on early redemption of a personal loan

According to the TOS written here: https://www.sc.com/sg/personal-banking/tnc/en/_pdf/cb_all-tnc.pdf (bottom of page 51) 37.2 The following terms and charges will apply if you close the CashOne ...
1
vote
1answer
722 views

Income tax rebate on Housing Loan Interest for under construction house pending more that 3 years

I have booked a flat in Hyderabad with reputed Builders. I have booked the flat in December 2012. Loan of about 35 Lakhs was sanctioned in August 2013 and about 30 Lakhs was disbursed to Builder in ...
4
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2answers
1k views

Does paying more frequently on a simple interest auto loan save me money?

My Auto loan is calculated by "simple interest". Would paying weekly save me money? If so, wouldn't paying daily save me even more money?
6
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1answer
898 views

Can I deduct interest and fees on a loan for qualified medical expenses?

I took out a loan from a "medical lending" company in 2015 and paid it off later that year. All of the loan went to pay for necessary medical expenses (paid directly from the lending company to the ...
1
vote
1answer
397 views

How do credit card companies make money from cardholders who do not carry a balance? [duplicate]

How do credit card companies make money from cardholders who do not carry a balance? It seems credit card companies are eager to offer their services to borrowers even if they have a tendency to pay ...
19
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4answers
6k views

Paying Off Student Loans Early

I currently owe $34,558.00 in student loans ($31,000.00 principal + $3,601.83 unpaid interest accrued so far) with an average interest rate of 4.877%. I just started working full time ($70,000 GAI) ...
2
votes
2answers
469 views

Paying off a mortgage early

I am thinking about buying a property with a mortgage in the UK, living in it for 3 years, and then selling it. This is because at that point, I will probably be moving out of the city I am currently ...
2
votes
1answer
4k views

Do nonresidents of Canada have to pay income tax on interest income earned in Canada?

I am a Canadian citizen, but nonresident of Canada for tax purposes. I currently live in the US. I have a savings account at a Canadian bank in Canada and have earned a little bit of interest, around ...
2
votes
3answers
351 views

3 loans under my name, 2 are fixed, one is a declining balance interest loan. Which to pay first?

I've searched for this answer for a while, but my loans are set up in a different way and I'd love some advice. (FYI I don't live in the USA) Loan 1: Personal loan. It was $200,000 with a 4.95% Fixed ...
4
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2answers
1k 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 ...
0
votes
1answer
85 views

Lowest Interest Options for Short-Term Loan

I am looking for a short-term loan in the amount of $15k to buy some household items. I will be able to return the money in full by 3 months I have a credit score of 760+. Currently, I am seeing ...
-1
votes
3answers
322 views

What return are you getting on your money from paying down a mortgage on a rental property?

If you bought a $200,000 rental home with 20% down, what is the return on investment you're earning over the full 30 year period from paying down the loan using the rental income? We will assume the ...
1
vote
0answers
51 views

Add-On CD Formula

I'm starting to learn a lot about finance/investing on my own but I'm struggling with the calculations behind Add-On CDs. I opened an 14-Month Add-On CD with a $1000 deposit with a monthly $30 add-on ...
4
votes
2answers
330 views

Can credit card company charge interest even if all the bills are paid in full by due date?

I recently started using a credit card. I get the credit card statement by 22nd of every month, and the payment is due by the 1st of next month. The full amount is automatically debited from my ...
5
votes
1answer
192 views

Savings or mortgage overpayment

This question might be too simple, but I just want to make sure I am not missing a crucial detail. I currently have a mortgage which allows free overpayments (up to 10% of the mortgage value each ...
0
votes
1answer
309 views

How can I get more interest than the 2.8% my bank is offering me on my $60,000 AUD? [closed]

I have recently been given a $60,000 AUD for the deposit on a house. I have since discovered that I am not earning enough to get a good enough mortgate. I think if I wait a couple of years I'll be ...
4
votes
3answers
4k views

Loan repayment calculation and monthly compounding interest problem

I need to write a mock up application that returns a quote to potential borrowers. The specification says that "The monthly and total repayment should use monthly compounding interest". Program ...
2
votes
2answers
2k views

home loan part payment with emi effect - revised emi amount?

Loan Amount 1,215,371.00 Annual Interest Rate 10.15% Term of Loan in Years 12 First Payment Date 10/09/2014 Payment Frequency Monthly Compound Period Monthly ...
3
votes
1answer
116 views

How does payment of interest work when an account has a maximum balance?

I am considering opening a new savings account with the building society with which I have my current account. (For completeness, I am in the UK, the building society is Nationwide, and the savings ...
3
votes
6answers
3k views

Why is the breakdown of a loan repayment into principal and interest of any importance?

Repaying a loan is a type of cash outflow. Why should I care which part of each payment goes towards the interest and which part towards the principal? "A loan is a loan", no? I know that this ...
3
votes
2answers
1k views

How does inflation rate affect debt payoff strategy?

When reading a comment by user Philipp on this answer, he states: [W]hen the debt is in a currency which has an average inflation rate larger than the interest [in this case 0%], you essentially sa[...
1
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3answers
133 views

Free brokerage vs paid - pros and cons

I currently have 30 free trades per month with a brokerage firm due to my account balances at their banking arm. I will typically trade a few shares of various companies in very small dollar amounts. ...
0
votes
1answer
55 views

Money Saved on finance charges

I have recently paid off a loan in full which I started keeping track of in a double-entry personal accounting software. Because I was paying before I started tracking I entered the current loan ...
3
votes
1answer
373 views

Apartment Security Deposit refunds in Maryland

I paid $158.00 security deposit in April 1972. How much should I get back? I moved out on June 30, 2015 with no deductions for damages. I lived in Maryland.
0
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1answer
148 views

Compounded and Simple Interest Rates

Suppose we have a loan worth 10000 that is being repaid late as a lump sum on a given day 30 days after the due date. Suppose the original interest rate is 5% so that the amount owed before late ...
1
vote
1answer
4k views

Annuities and varying interest rates?

The gist: Let's say I have $12,000 and have $240 a week in which I can invest into an ordinary annuity. Let's say I invest $1040 a month as opposed to $240 a week. The interest rate is 3% p.a. ...
11
votes
4answers
5k views

Why the interest does not stop on the day of paying off the whole loan

We are trying to pay off our 20 years fixed mortgage after 12 years and when I called the mortgage company and asked for the balance (in my calculation is only 57000 of the principal left) the ...
0
votes
1answer
176 views

Shouldn't nominal interest rates be illegal? [closed]

First of all, I'm really new to anything related to financial math and the like, but I just can't get my head around these nominal interest rates. The way I'm getting it is that it's just a euphemism ...
1
vote
1answer
222 views

How does a variable interest rate loan work?

I took out a $100,000 loan on my house on a variable rate loan at 4.5% for 30 years. For example, see this calculator. Assuming the interest rate stays the same, the final cost will be $145,000. In ...
3
votes
2answers
414 views

Who gets to write off (deduct) interest part of a mortgage payment?

On a U.S. Federal tax return, you can write off interest and property tax payments on a mortgage. Who gets to do that? Just the person in whose name the mortgage is? Or anyone on the title of the ...
4
votes
2answers
4k views

Can you subtract credits/returns/refunds from statement balance?

Most credit card companies in the US do not charge any interest on any purchases if you pay at least the statement balance every month. E.g. you effectively get between 25 and 30+25 days of interest ...
0
votes
1answer
11k views

What is the formula for loan payoff with daily compounded interest and monthly payment?

My goal is to make a graph using this formula for all possible monthly payments. Let's say... Loans: 21750 Monthly Payment: 220 Daily Interest: 4.0% / 365 What formula would I use to get the total ...
1
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1answer
269 views

Is the interest on EE series US Savings Bonds accrual dates prorated If I cash in just before an accrual date?

I have several EE series US savings bonds which I would like to cash, they were all given to me on the same date in different years, and I calculated the interest online, the calculator said that ...
2
votes
2answers
240 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%, ...
0
votes
1answer
1k views

What is the formula for calculating the amount of money I end up with in a given period (salary and compounding effect)?

I'll give a concrete example (couldn't find a similar question): Let's say I have an amount of money M at time t = 0 (first month). Every month, I get a given amount (let's say constant) of R On my ...
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 ...
1
vote
3answers
160 views

Does Maxing my Roth IRA Early in the Year Provide More in the Long Run?

Recently, I've been looking into investing into a Roth IRA since I'm in the lower end of my twenties. Due to no employer match and feedback from co-workers, I felt this would be a good option to ...
3
votes
1answer
227 views

Should I put a small amount of savings in a high interest savings account?

The highest in Canada that I've found is 2.8% interest, compounded annually where the interest is calculated daily. I have $2000, and the initial amount and the interest earned is guaranteed by a ...
1
vote
1answer
501 views

401K or Indian CD

I am debating on contributing to 401k(which is being invested fully) va putting a sum (say $10k) in Indian CD. I am assuming investment in stocks would return about 6-8% where as Indian CD would ...
0
votes
1answer
126 views

Pay down mortgage or low interest student loans [duplicate]

I have both a mortgage and student loans, as many now do. My mortgage is at 5.5 % with ~ $250k balance and my student loans are at ~ $98k with 2.125 % interest. The remaining number of payments are ...
6
votes
1answer
223 views

Deferring mortgage interest expense to next year when filing taxes?

I paid around $25,000 in mortgage interest payment last year, however, I had no income. I was wondering if I could defer this expense to next year and omit it this year. Since it will not benefit me ...
3
votes
1answer
216 views

Low-interest 30yr mortgage - can the bank pull a fast-one?

I'm on the cusp of signing a 30-year fixed mortgage at 3.8% interest (I might even be able to negotiate it down to 3.6%). Looking at historical interest rates, it's a dead-certainty that interest ...
-4
votes
5answers
905 views

Mortgage vs. Loan?

I understand the math behind how banks calculate the interest to principal ratio throughout the amortization period. I want to know why banks want you to pay as much interest as possible first? In a ...
1
vote
1answer
197 views

Do I need to pay tax if I earned 10 pounds interest from peer-to-peer investment?

If I earned 10 pounds in tax year 2014/15, do I need to pay tax? I just started investing in Funding Circle, I earned few pounds. This just looks silly to pay tax from 10 pounds but maybe that doesn'...
1
vote
1answer
118 views

Calculating a simply complicated return?

I have been tracking investments in a spreadsheet for some time. Each row is an equal time period, the balance includes dividends for that time period, and the transfers in our out for that time ...