# 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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### 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 ...
3k views

### Calculating Compounded Salary Increase Percentage with Multiple Years and Durations

I am trying to calculate the cumulative salary increase across 10 years. The issue is that some union members received raises multiple times a year, and other years they received no raises. I am ...
133 views

### How are banks able to offer high interest rates on foreign currency fixed deposits?

My bank offers foreign currency fixed deposits (FCFD) at a high rate of interest. What's the catch? I know how the bank earns money on domestic currency fixed deposits: by loaning out the money or ...
109 views

### Daily interest calculation on a 30/360 basis, considering payment occurs before schedule — how-to in Excel?

I'm setting up a payment spreadsheet for a loan just granted, and want to be able to make daily calculations of accrued interest. The debtor has been given a payment schedule with an interest only ...
14k views

### Why is the money factor defined the way it is?

In some loan situations, especially car leases, people like to talk about the money factor, which is a number given by interest percentage/2400 Where does the 2400 come from? I understand that it is ...
35 views

### Interest Rate and Present Value Question

I'm trying to answer the hypothetical question posted below (for educational purposes) but I'm very confused about its wording regarding the interest rate. If I assume that the interest is compounded ...
44 views

### Are all cryptocurrency exchanges and financial lending institutions required by U.S. law to provide a 1099 form to the investor?

I am currently thinking of putting up a portion of my crypto assets on a reputable cryptocurrency lending platform. I asked them if they provided a 1099-INT for the interest that I would earn on my ...
36 views

### Calculate value of investment with variable interest + periodic payments (Excel/Google Sheets)

I know about FV and FVSCHEDULE but how do I combine them? Say I make monthly payments into an account with a variable interest rate ... how do I calculate future value? Or do I have to build out the ...
204 views

### What is a good starting point for a new investor?

Firstly to clarify, I am not looking for financial advice, I am trying to find out where is a reasonable starting point for someone who has no experience, some cash in an ISA and is risk averse. I've ...
66 views

### How do you treat interest (both simple and compound) earned on cryptocurrencies?

Currently, on an exchange platform, I am pledging about 10 BCH (approx. \$2800) which should earn interest p.a. of 8 % paid out every three months. The interest is paid in BCH, meaning that 8% of 10 ...
8k 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 ...
57 views

### Unpaid accrual expenses [closed]

Let's say for-profit corporation ALPHA INC. borrowed \$1M from person JOHN DOE, who is also an executive officer of the corporation. The corporation ALPHA INC. uses accrual accounting method, while ...
91 views

### An investor holding an 8% subordinated debenture will receive how much at maturity?

I came across this question in the Wiley Series 7 2020 book: An investor holding an 8% subordinated debenture will receive how much at maturity? a. \$1,000 b. \$1,080 c. \$1,040 d. Depends on the ...
55 views

### Should I focus on repaying private or federal student loans during Covid-19 and CARES act?

The CARES act puts the interest rate for federal student loans at 0% until December 30th and there are no mandatory payments for student loans until that time. I owe \$32,000 in federal loans, normally ...
264 views

### Why do banks pay a compound interest on deposits instead of simple interest?

Why do banks pay a compound interest on deposits? Obviously they'd be better off paying a simple interest instead, which would still be attractive to their customers. However I figured that in such a ...
312 views

### Are there ways for me to generate \$40k per year in perpetuity from \$300k? [closed]

Why or why not? Even if I did get \$40k once, how unlikely is it to happen again? Some obvious answer are getting a job paying \$40k a year (reasonable, but not what I'm asking) and spending the ...
421 views

### Doesn't the existence of FDIC incentivize savers to put their savings in the most risky bank?

The riskier something is, the more interest/coupon would be demanded by the lender. In the case of choosing where to put my savings, wouldn't the existence of FDIC incentivize searching for the bank ...
2k views

### How to separate interest paid on a credit card between personal and business expenses?

My wife has a home business selling clothes. She purchases all her inventory with a credit card but she also uses the card for personal expenses. I understand that on the IRS Shedule C, we can write ...
101 views

### Do I earn interest when shorting stocks?

Suppose I short 100 shares of a \$5 stock. My cash balance will be +\$500 due to the short position. Does this \$500 earn any interest? I have heard two opposing answers: The \$500 earns interest, and I ...
70 views

### Calculating interest and Principal Paid using TI-84

How do I calculate the net quantity of interest on a loan, and the net quantity of the principal on the loan, that I have paid off after a given number of payment periods in the finance app on a TI-84 ...
65 views

### Report interest to HMRC - less than personal savings allowance

[UK] Do I need to report to HMRC if I earn less than £1,000 (personal savings allowance (PSA) basic rate taxpayer) in interest? I also have CGT of less than £12,000.
78 views

### Compounding Interest

How to calculate compounding interest and maturity value of recurring deposit. e.g. Mr A deposit \$ 1000 per month in bank @ 5% p.a. for 5 years. Interest compound quarterly. How t0 calculate maturity ...
151 views

### Does a bank look unfavorably on someone who pays off their credit card as soon as the introductory period ends?

I have a card for which I had a 0% intro period in which I carried a balance of around \$10k, until the intro period ended. Then I paid it off in full so that I have a \$0 balance - from \$10k. I'm sure ...
53 views

### Can I renegotiate desirable rates and terms on a paid-off credit card?

I would like to keep and use my business credit card, but I do not need it. I paid off around \$10k today which took my balance to zero, now that my 0% introductory rate has ended. (The card is around ...
45 views

### How to read/decipher the percent % in a bond's interest versus coupon rate question or example

I was studying about bonds, more so accreted/coupon bonds that were discounted. As far as I know and believe to be true is that when a question says: 1) Q. "Mr. Dancer purchases a 5-percent ...
55 views

### Find ending balance given return rate and amount added each year

If I have an investment that grows 10% per year, and every year I add an amount, is there a formula that can be used to find my ending balance after n years? The following demonstrates this: year 0: ...
161 views

### Using credit cards to pay personal loans

Personal loans issuers won't allow you to use a credit card to pay your loans. Is there a way around this? I have lots of credit card with good amount of remaining credits. And I have very high ...
5k 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 ...
25 views

### Term Life Insurance premium vs Interest/Inflation rate

I am thinking of buying a term insurance plan for myself in India and am 28 years old. My premium per year to be paid for a period of 10 years and coverage till 99 years works out to be 111,213 INR. ...
139 views

### Spouse earns \$50 K yearly, you \$0. How much tax on joint HISA?

We both maxed out RRSP, TFSA. Each has 3.3% HISA at Laurentian Bank. We don't want deposit over \$100 K, CDIC's coverage. No other CDIC institution pays 3.3%. We open a joint HISA — 2 below — and only ...
38 views

I understand cash advances accrue interest from the very second they're made, but I don't understand why my credit card company continues to charge me cash advance interest after I've paid my account ...
21k 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 ...
47 views

### How to calculate proceeds when buying stock with borrowed money?

Suppose I borrow money and use it to buy stock, expecting the stock price to raise short-term. HMRC provides clear instructions on futures and contracts-for-difference (CFDs), but none on custom ...
73 views

### Waiting for a refund that was approved 4 months ago. Company stalling and not getting back to me. Can I charge them interest on the sum they owe me?

As the title says, I booked a ticket with an airline (Condor Air) August, 2019. On December, 2019, I was granted a refund because their parent company went bankrupt and the airline stopped operating ...
74 views

### Are owned stocks considered balance?

I want to start investing money into stocks and for that I was comparing depots (broker bank accounts?) I found one that seemed very interesting to me but when I checked their pricing I figured that ...
17k views

### What to do with \$1,000,000.00 for 3&1/2 months?

We have 1 million dollars from the sale of a farm, which we want to use to pay down land debt. But we can't make a payment until the anniversary date of July 5. Right now it is in an interest ...
81 views

### What determines the interest rates of government bonds?

It's not clear to me how the interest rate of a specific government bond changes. I would like to make a comparison with cryptocurrency exchanges. Consider, for example, the price of bitcoin on ...
150 views

### Nonresident aliens do not need to pay tax on earned interest?

I am a nonresident alien living in the USA and paying federal and state taxes on my salary. I am working in a university in Colorado with a J1 visa which is valid from 06/24/2018. I have a social ...
1k views

### Calculation on Accrued Interest on typical student loan

I was reading an article on accrued interest as it pertains to student loans, and this is what was said: "Say you borrow \$5,000 each year you’re in school at an interest rate of 5% each year. ...
587 views

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 ...
210 views

### Must I file Form 1099-INT for interest on a business loan from an individual?

The 2020 Instructions for Forms 1099-INT and 1099-OID says that "you are not required to file Form 1099-INT for interest on an obligation issued by an individual", but I don't understand what they ...
92 views

### Finance loan calculation [closed]

I was trying to do some maths in excel, I was able to calculate the amount I will be paying for a 40000USD loan at a 13.9% (7 years) based on amortised scheduled repayments with a constant interest ...
2k 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 ...
338 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 ...
318 views

### \$0.30 1099 tax form received, should I ignore it?

Context: I am not an US citizen nor do I live in the US (I live in Europe). 4 years ago, I was working in the US and had a bank account there. Then I moved to Europe in my home country. I have some ...
113 views

### How do I deal with taxes on a U.S. Savings Bond that matured a few years before it was redeemed?

My parents recently found a 30-year Savings Bond of mine that matured in 2016. I redeemed it at the bank in late 2019. My understanding is the correct way to handle this is to file an amended 2016 ...
222 views

### Credit cards: Is it worth using the interest-free period on a second card?

I am about to start a 12 month part-time course, requiring variable but monthly payments. To maximise my budget I want to pay for it via credit card, but am trying to understand which method will end ...
45k views

### Daily interest calculation combined with monthly compounding: Why do banks do this, and how-to in Excel?

I often see banks advertise (for accounts with fixed yearly interest, let's say 1.5%) – "interested is calculated daily, and compounded monthly". I have 2 questions: Why are they calculating ...