108
votes
What to do with $1,000,000.00 for 3&1/2 months?
If you need that money for a payment 3 1/2 months away, then you need to be extremely risk averse. Maybe even to the point that you may want to spread that $1mil to several banks to stay under the ...
- 3,244
104
votes
Accepted
How does a bank make money on an interest free secured loan?
A "true" 0% loan is a losing proposition for the bank, that's true. However when you look at actual "0%" loans they usually have some catches:
The interest actually accrues at some rate but is not ...
- 142k
104
votes
Accepted
Why would anyone buy U.S. Treasury Bills?
No, what it says is “In half a year, we’ll give whoever holds this bond $10,000 for which you pay us $9,750 now”.
This is equivalent to an annual interest rate of about 5% (the example is showing a ...
- 3,240
88
votes
Accepted
Can I take out a loan and pay it back immediately to avoid interest?
It will depend on the terms and conditions of the loan you take. Some loans have penalties on early repayment while others do not.
- 3,652
85
votes
Accepted
Multiple loans, multiple payers - how to snowball fairly
First off, your commitment to paying down debt and apparent strong relationship with your brother is admirable. However, I think you are overcomplicating your situation and potentially endangering ...
- 43k
84
votes
Prepaying a loan: Shouldn't the interest be recalculated like a shorter loan?
When you pay off a loan early, you pay the remaining principal, and you save all of the remaining interest. So you do save on interest, but it's the interest you would have paid in the future, not the ...
- 1,193
71
votes
Accepted
What would be a recommended interest rate for an unsecured loan to individuals with mediocre credit rating and income close to expenses?
You're not a bank, so don't try to think like one. Banks base their interest rate off of the average risk of default for similar borrowers based on carrying multiple loans to spread the risk. In your ...
- 142k
70
votes
Interest: what is the most strategic time to make a purchase: just before or just after the statement comes out?
In order to pay a lower interest rate on my credit card balance...
pay the balance in full by the due date. That way, you pay $0 interest. No need for scheming and strategizing: if the bill says $...
- 50.8k
66
votes
Why don't bond makers just get loans?
They are not necessarily a scam, or even likely to be. There is a reason they didn't just borrow the money at 5% though and this is virtually certain to be because they are higher risk.
There was a ...
- 1,069
59
votes
How can I buy things with monthly payments in the US?
Trying to frame my advice in a way that technically answers the question:
Don't buy it right away. Pay $100/month to a savings account, and after ten months, buy the item with your accumulated $1000.
...
- 4,476
43
votes
Accepted
Is exceeding the U.K. Personal Savings Allowance - and being taxed - a bad move?
It’s fine, because being taxed as above still leaves me with more than if I hadn’t opened the account (e.g. left the initial £20,000 in an account that didn’t bear interest).
This seems pretty clear-...
- 30.2k
35
votes
Should I pay off my car loan within the year?
Personally, I don't think that the interest from the car loan is worth the credit history you're building through it. There are other ways to build credit that don't require you to pay interest, like ...
- 6,839
32
votes
Accepted
Is there any advantage to a longer term CD that has a lower interest rate than a shorter term CD?
Taking a longer-term CD with a lower interest rate could make sense if you expect CD interest rates to drop in the near future. Suppose you could get a 6-month CD with a 5.1% interest rate, or a 12-...
- 5,208
31
votes
How does a bank lend your money while you have constant access to it?
Fractional Reserve Banking, that's how, under the assumption that only a small percentage of customers will take all -- or even most -- of their money out at any one time.
The country's central bank ...
- 50.8k
30
votes
How can I buy things with monthly payments in the US?
I am a new international student in the US
Aren't you here on an F-2 visa?
that it's price is $1000, and I want to do the payment like $100 per month for 10 months (with no extra interest), how can ...
- 50.8k
29
votes
Why don't bond makers just get loans?
Plenty of other people have mentioned that the bond issuer might be a bigger risk. That's a possibility, but there are other factors -- probably more important factors -- in play as well.
First, ...
- 391
27
votes
How does a bank make money on an interest free secured loan?
Most 0% interest loans have quite high interest rates that are deferred. If you are late on a payment you are hit with all the deferred interest. They're banking on a percentage of customers missing a ...
- 71.2k
27
votes
How can bonds reach 0 and negative interest rates? why would someone buy them?
And how can bonds reach 0 and negative interest rates?
0% interest is simple. You just skip the coupon payments and get your money back when the bond matures. Negative interest rate bonds are issued ...
- 7,462
26
votes
How to separate interest paid on a credit card between personal and business expenses?
There is no rule of thumb that can be used to separate the amount paid in interest.
The reason why so much interest was paid was because when you don't pay it off each month the new charges ...
- 145k
26
votes
Interest: what is the most strategic time to make a purchase: just before or just after the statement comes out?
tl;dr: Prolong every new charge as long as possible until you are back to paying in full every month.
In the best case scenario, if you are paying your balance due in full every month, it doesn't ...
- 47.3k
24
votes
How do I calculate monthly compound interest in Google Sheets?
You just use the compound interest formula:
Principle * (1 + Rate / Time) ^ Time
For Cell C2 you want this formula:
=B2*(((1+(D$1/360))^(C$1-$A2))-1)
Column A is deposit date
Column B is deposit ...
- 49.1k
24
votes
Accepted
If Turkey doesn't go bankrupt, is there any chance they won't pay bonds profits?
You're contemplating paying 30,000 lira ($5000 US or 4400 EUR) today for bonds with a face value of 37,500 lira. If Turkey doesn't go bankrupt, in one year the bonds will pay out 37,500 lira.
If you ...
- 6,788
23
votes
Accepted
How to save the most money paying off a 20% interest car loan in 1-2 years?
Which way would save the most money?
Paying of the car today would save the most money. Would you borrow money at 20% to put it in a savings account? That's effectively what she is doing by not ...
- 142k
23
votes
What to do with $1,000,000.00 for 3&1/2 months?
In addition to R.Hamilton's answer (upvoted), I would add that there is some not insignificant risk at the moment of financial crisis #2 due to the demand and supply shocks, (covid 19 + oil market ...
- 398
23
votes
Can I take out a loan and pay it back immediately to avoid interest?
"Immediately" per the title, mortgage refinance loans and many other consumer loans are covered by the Truth in Lending Act providing a Federal 3 day "right of rescission", where ...
- 8,419
22
votes
Prepaying a loan: Shouldn't the interest be recalculated like a shorter loan?
One way to think of the typical fixed rate mortgage, is that you can calculate the balance at the end of the month. Add a month's interest (rate times balance, then divide by 12) then subtract your ...
21
votes
Should I pay off my car loan within the year?
Something I'd like to plant firmly into your mind - If you're able to save up enough money to buy the things you want outright, credit will be of little use to you.
Many people find once they've ...
- 2,755
20
votes
How can I buy things with monthly payments in the US?
When you use a credit card and pay over time, you will pay plenty of interest. 16% to 20% a year is not unusual. So the wrong way to do things: Buy a $1,000 item with your credit card. Pay $100 every ...
- 23.9k
20
votes
Should I pay off mortgage or invest in CD?
Assume I have $50,000 loan that I could pay off (2.875 rate) which I
could invest in CD with 5.5 rate for 12 months, could anyone please
tell me what would be the correct calculations? Thanks!
...
- 71.2k
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