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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1answer
139 views

Credit card 25day billing interest

I have a Home Depot credit card that is supported by TidewaterFinance. I was charged interest on my purchase even though I had zero balance 2 cycles ago and never received a bill last month because I ...
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1answer
119 views

What kind of parameters do you look at before investing? [closed]

As the title says, when you are about to invest long/medium term into a company, which kind of parameters do you look at (beside the fundamentals) P/ E ratio? P/ Revenue? Can you help a noob please?...
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3answers
178 views

How to use credit card with balance on it?

I have a credit card that currently has balance on it past grace period. I am working on paying it out, but I also need it to pay for online purchases, etc. I know that once you are past grace period,...
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2answers
1k views

Is simple interest related to the actuarial method?

I'm trying to understand different methods of calculating interest on installment loans. I keep coming across the terms "simple interest" and "actuarial method". They seem to be related but I haven'...
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2answers
2k views

Can you calculate 10-year Treasury Note yield from price or vice versa?

I grabbed this screenshot from CNBC this morning: Are the price ($98.0469) and yield (2.981%) mathematically related? Investopedia says "A 10-year Treasury note pays interest at a fixed rate once ...
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0answers
88 views

I am being offered whole life insurance with a savings account. Should I take it?

I am being offered a savings account with a Whole life Insurance policy. I believe it is 100,000 policy for $30 a month. However, half of this goes to a savings account with a 4% "compound interest."...
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0answers
68 views

Lending club investments through a numbered company for favorable tax?

I'm part of a lending club in Canada that has just allowed corporate lending. My marginal tax bracket in Canada is 26%, so I'm trying to figure out if there is an advantage to lending through a ...
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13answers
25k views

Prepaying a loan: Shouldn't the interest be recalculated like a shorter loan?

Maybe I'm incorrect in my thinking, but I have a question about prepaying a loan. When you take out a mortgage on a home or a car loan, it is my understanding that for the first years of payment you ...
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0answers
87 views

How is interest rate calculated for a floating mortgage

I am trying to calculate the amount of interest I need to pay for a mortgage that just turned from fixed to floating. Current balance is: -550,000 Interest rate: 5.95% Original term: 30 years The ...
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2answers
352 views

Compound Interest & Mortgages

Mortgages are compounded 2 times a year in Canada and 12 times a year in the USA. However, I read that mortgages are simple interest and not compound interest because you pay the interest for each ...
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1answer
80 views

Does my life insurance company have to tell me the interest rate for borrowing on my cash value before I process the loan?

I have a permanent (whole life) insurance policy. I want to take out a loan on my cash value, so I called the company to get information. The company representative told me that they would give me ...
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2answers
1k views

Calculating amortisation payment amount, where first payment date differs from loan start date

I'm trying to reproduce the schedule, but I cant seem to get the same Payment and Interest for each month. The tricky part here is that the Loan start date is 9 Feb 2017 but the first payment is only ...
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2answers
170 views

What's an easy way to create a floating amortization loan? [duplicate]

When dealing with a mortgage company, paying off a loan is quite simple. Now everything is online and most of the times you can pay more than the minimum payment each time. Each month the interest ...
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2answers
385 views

How can change in open interest of a particular day be less than volume traded on that particular day for an options?

this is the image of nifty option chain. I am new to options trading and I learnt that open interest change can occur only upon a transaction. But here, the change in open interest is less than ...
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4answers
4k views

Can you pay off a Credit Card quicker by reducing the daily balance?

If I have x amount on a credit card, let's say $5000. And let's say I make a paycheck of $750. If I take that $750 and put it on the CC, and I do not spend the newly credited $750 immediately (say ...
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2answers
132 views

Daily Interest Monthly Compounding Multiyear

I downloaded the Excel spreadsheet mentioned in the accepted answer to this question: Daily interest calculation combined with monthly compounding: Why do banks do this, and how-to in Excel? It was ...
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1answer
218 views

If I'm taking the standard deduction, do I still have to enter my school loan interest?

Title says it all. If I know in advance I'll be taking the standard deduction, do I still have to enter and submit my student loan interest? Or any itemized deductions, for that matter?
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3answers
14k views

For most loans, do you pay interest on the principal or amount remaining?

For example, if I take out a personal loan from the bank for 1k for 1 year with 10% interest, I would pay $100 in interest. What would happen if I paid back $900 on the first day of the loan, and then ...
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2answers
296 views

Finding monthly payment for ordinary simple annuity with varying interest rates? [closed]

I've been working at this question for some time now and I'm quite stuck. Some help would be greatly appreciated. I can figure out recurring payments by themselves, but I'm drawing a blank when it ...
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0answers
94 views

allocation of payment between principal and interest

Individual made a (second) mortgage loan to another. The loan has been in default for many years. The bank (first mortgage holder) foreclosed on the property. The individual lender received a ...
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1answer
147 views

Take out a small loan or use money from bank

I'm trying to get some different opinions on what I should do. I'm selling my home and buying another. The difference is $25,000. I have $50,000 in my bank account, no debt, $10,000 in a Roth IRA and ...
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4answers
3k views

Shouldn't a Roth IRA accumulate more than 1 cent of interest per month?

Ten months ago, I opened a Roth IRA with an initial principal of $1,000, invested in one of those "Target Date" retirement mutual funds. I also set up $100 automatic monthly contributions. The ...
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2answers
472 views

equivalent monthly cost with multiple interest rates

Is equivalent monthly cost equal to equivalent annual cost divided by 12? Also, using the equivalent annual cost HERE, how would I change the formula for differing rates over the period of time. ...
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1answer
915 views

High Interest Savings Account vs Bond ETF

Which of the following is a better investment for long term investing and why? High interest savings account paying 2.3% interest, no account fees and the funds are protected by the Canada Deposit ...
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3answers
10k views

How is interest in my bank account calculated?

I am a software professional. I have one question. How do banks calculate interest on money deposited, if I get, say, 10% per annum? Say I deposit say Rs.1000 on the 1st day of the month; then I ...
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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) ...
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11answers
10k views

Where can I park my rainy-day / emergency fund? Savings accounts don't generate much interest

Savings accounts don't seem to generate much interest. What other options do I have for my emergency fund?
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1answer
188 views

How do I research if my student loan company is doing something illegal?

I have a federally subsidized loan (US), which was put into forbearance in March of this year. I didn't notice, because it is an auto pay account, but, I'm not in school and did not request any ...
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2answers
2k views

How does the amount of down payment of a car affect loans/interest?

My credit rating is poor but I'm looking at a car that is around 27,000. If I have a large down payment (40%) to put towards the purchase of the car would I still get approved for a loan for the ...
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3answers
2k views

Why is mortgage interest deductible in the USA for a house you live in?

In Australia, if you have a mortgage on the house you live in the interest and other expenses are not tax deductible, unless you rent out one or some of the rooms or run a business from your home, in ...
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1answer
77 views

Bond ETF NAV before dividends

This BlackRock page says that a bond ETF's NAV will fall by an amount equal to the dividend distribution when a dividend is paid out. I assume that means that the bond ETF's NAV rises as interest is ...
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2answers
2k 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 ...
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4answers
372 views

Is it possible to borrow money to accrue interest, and then use that interest to pay back the borrower + fees?

Say I want to borrow $225,000.00 to accrue interest on a 1.20% APY account. I promise the lender that I'll pay them a fixed-rate of this interest with agreement that I cannot withdraw nor touch the ...
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4answers
184 views

Credit Card Transfer/Payoff Advice

I have a credit card that is just about maxed out. I'm trying to get into financial health but the purchase interest charges are killing me and it's hard to get ahead. My cash flow is also terrible ...
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9answers
26k views

How does a bank make money on an interest free secured loan?

I was having a discussion about the ethics of charging interest on a loan, and I was of the position that allowing the charging of interest encourages more loans to be given, and thus contributes to ...
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3answers
157 views

How are mortgage payments decided? [duplicate]

I always used to think that monthly mortgage payments had fixed proportion of interest payments and house payments (determined by rate and term). But, I recently heard that you start off with making ...
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6answers
1k views

Paying over minimum monthly charge of credit cards

I have a $80 minimum on my credit bill. If I pay them $100, do the additional $20 go to the card's Principal or Interest? If it goes to Interest, do I have to explicitly state that those $20 go to ...
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7answers
519 views

Why “N-year” loans (and other complications)? Why does a loan need so many parameters?

If the title sounds ridiculous, please hear me out before downvoting. Let's start simple. You have too much money on your hands and want to start a loan business. If you neither want to gain nor ...
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3answers
12k views

Can I take out a loan and invest it at higher interest?

I noticed today that my bank is offering small loans of up to £15000 at 3.3% interest. Meanwhile, services like Zopa and RateSetter are offering over 6% interest on investments in their platforms. I ...
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5answers
7k views

Multiple loans, multiple payers - how to snowball fairly

My brother and I both have a large sum of student loan debt. I have more than he does and my interest rates are slightly larger as well. We are both attempting to snowball our debt separately. It ...
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9answers
7k views

Should I pay off my car loan within the year?

I saw another question like this, but I am in a bit of a different situation. I am 19 years old, in college, and have no credit history. I saved up enough money to buy a car, but decided to get a ...
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3answers
11k 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 ...
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1answer
849 views

Is it legal to charge interest on interest?

I bought a mobile home through a private deal, financed by the owner. The last payment of a thousand dollars was an interest payment. Due to financial problems, I could not give them the whole ...
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9answers
12k views

Is asking to pay off principal first a placebo?

Some people say that in order to pay off a loan sooner, you should ask the lender to "apply your payment towards the principal", so that they won't "apply your payment towards the interest". From my ...
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2answers
864 views

Max allowances on w4, and not pay income tax till end of year?

Is there a reason that I can't do the max number of allowances on my w4, and pay no income tax during the year? I would then put the amount that you are normally supposed to withhold every pay check ...
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7answers
85k views

Why do banks want you to pay off interest before principal?

When you take out a traditional mortgage the first payment you make to a bank pays off mostly interest and then later payments start paying off principal. What is the reason for this? Is it just a ...
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1answer
48 views

logistical details of interest and dividend payments on assets traded on the secondary market?

Forgive me if this is a silly or extremely basic question, but I was wondering how the logistics of interest and dividend payments are handled on assets, such as mortgages, bonds, stocks, etc. I ...
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6answers
2k views

Pre-pay mortgage in full - do you have to pay off the projected interest as well?

How does paying off a mortgage early work? Example: I have a 30 year fixed rate mortgage of 3.5%, the amount borrowed is $300,000. I have just inherited $300,000. I am in the first year of the ...
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3answers
913 views

Calculate a weekly payment on a loan when payment is a month away

I'm trying to calculate a payment on a loan given the standard P=r(PV)/1-(1+r)^-n formula. How do I factor in interest accumulated if the first payment isn't due for 31 days? For reference, interest ...
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1answer
830 views

Calculating Interest Accrued for a late payment

I'm trying to calculate the interest accrued on my amortization schedule manually. I can calculate it fine if payments are exactly one month apart but this payment is More than 1 month apart. This ...