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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4
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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 ...
3
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1answer
80 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 ...
0
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4answers
375 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
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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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3answers
158 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
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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 ...
15
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2answers
30k 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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7answers
520 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
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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 ...
-1
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1answer
859 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
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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 ...
28
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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 ...
21
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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 ...
1
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3answers
949 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
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1answer
842 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 ...
22
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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 ...
5
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2answers
251 views

Need help on understanding how math is done on this example

I am not sure how the math is exactly done for the interest to come out like that. Also, what is the capitalized interest? EDIT: What is an outstanding principal balance?
4
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2answers
1k views

How to save the most money paying off a 20% interest car loan in 1-2 years?

Long story short: My girlfriend has a 20.53% APR car loan. No one will refinance the loan because of the value of the car, roughly $5,000. Theres still 50 months left on the loan. Total left with ...
1
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1answer
159 views

Purchase Interest on paid off credit card

I live in Canada. Recently I paid my RBC CC off in full before the monthly due date. On my next bill I incurred interest called "purchase interest" Why?
6
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1answer
125 views

How should interest paid annually be reported for tax purposes

If interest from a savings account is paid annually in the middle of a tax-year, should the full amount be reported on the tax-return for the year it is received, or do/can/should you pro-rata the ...
0
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1answer
49 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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2answers
192 views

What are the downsides to high-interest savings accounts?

Most US banks offer vanishingly small interest rates on their money market savings accounts, while many others offer rates around 1.0%. Assuming that I keep my deposits below the FDIC insurance limit, ...
3
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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 ...
3
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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: ...
3
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5answers
2k views

Should I use a home sale profit to pay down student loans or put it towards next house?

I am in the process of moving and stand to profit close to 100k on my current home sale. I also owe approximately 200k in student loans. The interest rates on mortgage and loans are within 1% of each ...
2
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1answer
65 views

ACH vs Mailed Checks in the context of Overpayment

I have not been successfully able to get a clarifying answer from my mortgage company on this issue, so I was wondering if anyone here knew. If I am overpaying my mortgage, by let's say $100 per ...
9
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1answer
17k views

If I earned less than $10 in interest from my bank account, do I need to report it on my taxes? [duplicate]

I'm preparing my taxes with Turbotax, and its asking me for all the bank accounts I earned interest from. One of these accounts has earned less than $10 total for the year. Because of that this bank ...
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2answers
136 views

Interest or APR Query

I have really bad credit from when I was younger. The only credit card I can get is one 49.9% APR. If I spend £500 in a single transaction and pay back lets say £50 a month, what interest would I be ...
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0answers
48 views

Interest expense deduction on rental property that was re-financed to pay off wife for her interest in home

I am in California in the United States. I stated renting my house out this year (2017). I originally purchased the home with my ex-wife in 2001, but bought her interest in the property as part of ...
8
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2answers
616 views

Large loan at zero interest or very little interest?

I have a big problem but a lucky solution. I have a huge amount of debt, student loans that add up to hundreds of thousands of US dollars. I have a relative who is willing to give me a loan to cover ...
0
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1answer
165 views

Does 0% APR mean I'm not charged interest? [duplicate]

If a credit card says you get something like, "0% APR for the first 12 months," does that mean you can get by with paying only minimum payments and not have any accrued interest build up? If so, ...
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0answers
65 views

Investment or saving options Northern Europe

I am interested in basic financial advice for my current situation. I am mid twenties, living in Northern Europe and have gathered some savings over the years. Currently living in a rented apartment, ...
2
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1answer
122 views

What credit card surcharge rate should I accept?

I have a long-term revolving debt account where interest is charged only for the outstanding balance. I am using a credit card for regular expenses in order to maximize the duration that money stays ...
2
votes
1answer
531 views

Hotel, double charges, overdraft and bank interest

Situation: During check-in at a hotel, I give them my (debit) card, do paperwork (fill in forms, sign documents and so on...). They hold some funds ($100 for example). Finally, during check-out, ...
1
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1answer
469 views

Calculating the number of years before an investment with increasing savings reach a certain value

I want to calculate the number of years required before an investment reach a certain value assuming increased payments. Ignoring the increase of payments, I can calculate using NPER (Google Sheets, ...
4
votes
1answer
756 views

Is the principal of a savings bond taxable, or only the interest?

Let's say I cash out some government savings bonds with a face value of $2,000. Since they are 10% bonds the total amount I get when I cash them out is $2,200. Do I owe taxes on the full $2,200 (...
3
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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 ...
32
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2answers
15k views

Why does my car loan interest go up despite making payments on-time?

In my first payment on 06-17-2016, the principal applied to my balance was $186.76 and the interest was $107.50. As I kept making the payment on-time, the second payment on 07-25-2016 was a bit of a ...
7
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5answers
847 views

How to correct interest rate for inflation?

I'm looking for someone to double check my math and who can tell me if I have correctly accounted for inflation. Say you hypothetically invest $100 with 7% rate and 2% inflation. You would end up ...
1
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1answer
55 views

Is transfer of long term investment proceeds from India considered taxable in the U.S.?

I am Indian origin and I have done many investment in India thru NRE bank account.(legally send money to India.) I have done all investment after I pay taxes in USA. All investment are long term, so ...
3
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2answers
1k views

Credit Card no interest period

A few weeks back I asked a question about getting a new credit card, and the answers were very helpful, but I came into some new information that I at the time I had not realized. My credit card ...
0
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2answers
338 views

A little advice please…car loan related

I have a car loan out that is $10,000. It's actually a personal loan at 10% interest rate. The vehicle is about 10 years old and has 135,000 miles. The KBB value is around $4,000. It's having ...
1
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1answer
761 views

Why does a bank deduct interest first and principal later

I want to buy a house but there is this one thing about the bank loan I am not able to understand. Lets say I am taking loan of 60L rs. and I start an EMI of X amount. The state bank of India (all ...
6
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3answers
1k views

Will having a secondary signee with bad credit on a mortgage raise or lower interest?

My girlfriend and I are purchasing a house. We were told that it would be better to have the mortgage solely in my name as the only account holder due to her credit score. My question is, between ...
4
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3answers
143 views

How do the UK's savings and dividends taxes (2016+) interact with the personal allowance?

The UK has rationalized it's tax treatment of interest on savings and dividends (NB this question is concerned entirely with investments held outside of SIPP or ISA tax wrappers). More details here ...
2
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2answers
867 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 ...
2
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1answer
385 views

Why does my interest charged (on loan) fluctuate from my own calculations?

I just want to know if I am calculating the interest correctly. Or is the interest rate is fluctuating slightly? Its not really that big of a fluctuation (we're looking at a range of 5-10 cents off). ...
4
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1answer
89 views

Does it make any sense for UK private investors to hold gilts directly and outside of a tax wrapper?

According to my understanding of gilts (which is in accordance with the answers here), private investors in UK gilts paying a premium on the redemption price (for example 2% T20s currently report a ...
0
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1answer
169 views

Does Gold Pay Interest In Negative Rates?

From my SO the other night: Gold pays interest when there's negative rates. If someone holds gold, they have to store it in a manner that will cost (money or time) and if someone holds gold in a ...