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.

Filter by
Sorted by
Tagged with
1
vote
1answer
142 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 ...
7
votes
4answers
43k 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 ...
0
votes
1answer
105 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
2k 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 ...
3
votes
3answers
378 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 ...
1
vote
1answer
265 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
125 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 ...
60
votes
10answers
14k 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% ...
0
votes
1answer
40 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
97 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 ...
3
votes
1answer
113 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 ...
2
votes
1answer
65 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 ...
1
vote
1answer
95 views

Credit Cards: Cash Financing Charges

I have a credit card, where the terms and conditions have this to say about cash withdrawal: B. Cash Advance Fees The Cardholder can use the Card to access cash in an emergency from ...
0
votes
1answer
141 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 ...
1
vote
1answer
124 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?...
0
votes
3answers
184 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,...
2
votes
2answers
2k 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'...
0
votes
0answers
89 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."...
1
vote
2answers
3k 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 ...
1
vote
0answers
70 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 ...
0
votes
0answers
88 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 ...
1
vote
2answers
417 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 ...
1
vote
2answers
347 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 ...
4
votes
2answers
165 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 ...
1
vote
1answer
242 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?
3
votes
1answer
83 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 ...
1
vote
2answers
335 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 ...
2
votes
0answers
103 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 ...
2
votes
1answer
150 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 ...
9
votes
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 ...
1
vote
2answers
580 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. ...
4
votes
1answer
1k 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 ...
1
vote
1answer
127 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 ...
0
votes
1answer
199 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 ...
4
votes
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 ...
3
votes
1answer
94 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 ...
0
votes
2answers
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 ...
0
votes
4answers
386 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 ...
8
votes
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 ...
1
vote
3answers
162 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 ...
69
votes
9answers
27k 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 ...
18
votes
2answers
43k 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 ...
1
vote
7answers
550 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 ...
9
votes
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 ...
-1
votes
1answer
1k 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 ...
0
votes
1answer
2k 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 ...
28
votes
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 ...
21
votes
9answers
8k 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 ...
1
vote
3answers
1k 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 ...
0
votes
1answer
946 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 ...

1 2
3
4 5
8