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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.

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5
votes
1answer
196 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
315 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
6k 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
vote
3answers
137 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
58 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
385 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
votes
1answer
153 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
226 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
424 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
5k 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
vote
1answer
301 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
316 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
2k 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
162 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
231 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
549 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
127 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
224 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
219 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
952 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
198 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
120 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 ...
4
votes
4answers
401 views

What to do with this cash- pay off ONE card, or pay down a few?

I've got a $5k payment coming through with about $12k in CC debt, over 4 cards. 1 card is at $3000 (total line is $4k), 14.8% interest rate, another at $3450(total line is 4.5k), 19.3% interest rate, ...
5
votes
3answers
2k views

Can someone explain to me how should I go about paying off my student loans?

I have two loans right now: $72k Balance - Minimum of ~$500/month payments and $30k Balance -Minimum of ~$350/month payments The part that is confusing me is how much of my ...
1
vote
1answer
155 views

Child is on the way, invest for college and car fund options - opinions

I have a baby on the way and own my own business. Because I have my own business my income is volatile every month, and don't want to count on contributing monthly for 20 years for my child college ...
1
vote
1answer
289 views

Student loans: Invest money until just before graduation (capitalization) or pay interest now?

There are lots of questions on SE about investing versus paying off student loans. This is not one of those questions. This question is about investing while you are still in school to pay off student ...
2
votes
1answer
4k views

Should I make partial pre-payments on an actuarial loan?

I discovered today that a loan I took out for home improvements doesn't use simple interest. I'm pretty frustrated with myself for not realizing this before I signed for it. Regardless, I'm trying ...
3
votes
4answers
841 views

How can a 'saver' maintain or increase wealth in low interest rate economy?

If low interest rates disadvantage 'savers' what are they supposed to do if they are not inclined to buy and spend? Where should you put your money (instead of it stagnating in low interest rate ...
0
votes
2answers
275 views

What is the best way to increase the earned money staying in US for an NRI?

Im living in US from last 1 year due to work assignment and will be here for another 3-4 years. What is the best way to earn interest on earned money? Shall I send all earned money to India account ...
3
votes
1answer
1k views

How to calculate Annual Percentage Rate

How to calculate Annual Percentage Rate (APR) given the following: A - Loan borrowed at the beginning (USD 1000), B - Loan total costs paid at the end (USD 2000), c - Number of compounding periods ...
2
votes
1answer
1k views

Capital gains on foreign investment?

An American "tax person" living solely in Canada must report any interest income earned in Canada on his/her US tax return. But, does this income include any gains or losses caused purely by currency ...
1
vote
1answer
536 views

Automating high- bank or credit union requirements (e.g. X debit card transactions per month)

Banks (and credit unions, etc.) that offer high interest typically require the customer to take some kind of action every month, such as performing 10 debit card purchases. I'm wondering if people ...
9
votes
3answers
19k views

Paying a Navient Loan's Principal

I have the following loans: A) $12,818 @ 9.25% B) $11,499 @ 2.25% C) $10,059 @ 2.25% D) $ 3,365 @ 10% I recently received a $5000 inheritance so I would like to allocate this in the best way ...
4
votes
2answers
348 views

Can a Roth IRA be used as a savings account?

If my understanding is correct, you can take out your contributions from your Roth IRA whenever you want without paying any penalties. If this is true, then other than the limit you can contribute to ...
1
vote
2answers
58 views

Income in zero-interest environment

In a zero-interest environment, what are safe (conservative) alternatives for income?
4
votes
1answer
116 views

Is it a good idea to max out a zero interest revolving credit account?

I have a 0% interest overdraft that's currently up to a £1200 limit, but I can request an increase. Would it be a good idea to transfer up to the limit (minus what I'd float in the account to make ...
13
votes
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 ...
0
votes
1answer
158 views

Lending Club - Interest rate and interest received compared with total payments discrepancy?

I have a Loaner's Lending Club account. There seems to be a discrepancy between some of the numbers on my account (the discrepancy would be in my favor, I just want to know why they are the way they ...
-1
votes
2answers
70 views

Calculating APR

If I have a loan at 5% interest over a year compounded semi-monthly does this loan have a higher APR compared to a loan at 5% compounded annually?
8
votes
5answers
768 views

Formula that predicts whether one is better off investing or paying down debt

This is more of a statistics/probability question but the implications for personal finance are obvious. Let's say you have extra cash (assume tax-advantaged space is already maxed out) and are ...
0
votes
1answer
191 views

How much should I pay to bank for educational loan?

I have a bank loan taken from one of the nationalised bank and I owe 4.54 lakhs at 11% interest to the respected bank I have not paid since last 2 years towards interest So I wanted to know how much ...