New answers tagged

3

Treat the debt as 2 debts. Treat the first loan as having principal 1500 lower than the actual principal, and add the interest from the 1500 balance a the lower APR to it (in your example this would be the monthly interest for an 8% APR on a 1500 loan, or ~30). When the "first" loan is paid down (principal falls to or below 1500), you will (possibly/likely) ...


-1

A programmatic and iterative approach seems to be the easiest. Starting with initial balance of $2500. s = 2500 r1 = 8/100/12 r2 = 18/100/12 q = 1500 n = 36 The following function sets p to s then runs p = p (1 + If[p > q, r2, r1]) - d for n iterations, then returns the absolute value of p. f[d_] := Module[{p = s}, Do[p = p (1 + If[p > q, r2, r1]...


5

You will need to solve this problem iteratively. A spreadsheet is a good tool for iterative calculations. One approach is: Start with the higher of the two interest rates. Compute the monthly payment given that interest rate, the total balance, and the number of payments. If you have already reached Step 11, use the value you most recently calculated in ...


0

If you are allowed to go short, fun can be had. You could just take the 12% offer and short (write) the 2,2 forward at 11%, pocketing in the 1% spread. Even better, borrow at 8% for both contracts (go short at 8%) and go long both 12% and 11% forwards, getting even more spread for yourself. Hope I got your question right.


3

The interest is calculated on a daily basis. There are several algorithms described in Wikipedia how exactly to do that, but roughly spoken, you accrue interest for every day with the balance for that day. For example, if you put $1000 into your account, keep it there for 20 days, then add $2000 and withdraw $500 the day after, after another 10 days you ...


2

It depends on your mortgage company, and how they've set up their web site**. If you happen to be with Bank of America, when you make a payment, you'll be given an option to include an extra amount. If you check this, you then get a choice whether the additional amount will be applied to principle, escrow*, or "other", which I suppose could include such ...


2

You'll have to read your mortgage contract and/or ask the mortgage company. Let's say you have a 30 year mortgage with fixed interest rate, and you are supposed to pay $1,000 every month. This month you pay $2,000. One way the mortgage company can handle this (which is not very nice for you financially) is to stash the $1,000 away, and if you don't pay ...


6

In your title you ask what happens typically. In the body of the question you ask if you have to specify how the extra payment will be treated. The answer is you have to ask your lender about your loan. My loan is through my credit union. I can make an extra payment anytime I want. The form on the website allows me to specify if the payment is to be ...


4

Mortgage rules differ by country, and within a country they further differ by the lender. Assuming this is in the US, and based on my limited experience (2 mortgages), you can only add extra payment on top of a regular payment. For example, if your regular payment is $1000, and you want to pay $500 extra, you make $1500 payment. Regular portion of the ...


1

My monthly minimum payment is under $200, and my employer contributes $200 on my loans each month. Is your employer contribution based upon your monthly minimum or will it always be $200 no matter what your monthly minimum is? How long do you plan to stay at your employer? Scenario 1 Employer contribution is always $200: I would just keep the student ...


2

Understanding that not everything mentioned might apply to you, here's what I'd do, in this order: Put $1000 in an 2% Savings Account Emergency Fund. Fund your 401(k) up to the Company Match. (Otherwise, you're cutting your pay.) Learn where all your money goes. (Not knowing this is how we slowly drowned in CC debt without buying lots of extravagant stuff....


2

Going to the official source, see IRS Publication 970 (2018 tax year link). The point of contention will be the official definition of "obligated". Per Publication 970, it has this to say: Don't Include as Interest You can't claim a student loan interest deduction for any of the following items. Interest you paid on a loan if, under the ...


0

Mortgage is borrowing money. Borrowing is like renting. Renting short term is cheaper than renting long term. If the rent rate is fixed but term is not, you want to "return" the rented money as soon as possible. This means paying off the debt ASAP (even before it's due) to avoid paying interest. Sometimes, mortgages have an early payment clause that allows ...


0

Assuming taxes, repairs and insurance are covered by the renter, then the internal rate of return depends entirely on your assumptions regarding the salvage value of the home. If you assume the home will have no net value at the end of thirty years, then you will take an annual loss of 2% per annum. If you assume you will recover $1,000,000 nominal dollars ...


1

It depends on if you can get a better return on your money than 2.5% (adjusting for tax deductibility of the mortgage interest). If so, you should get a mortgage for as long as possible. If not, as short as possible, while still being able to afford the payments.


1

In your agreement you can state that the 10% interest would be added to the loan on the 1st of every month at midnight, and that the interest would be based on the total balance of the loan at that point in time. So it would be [current total balance * 0.1 / 12] every month. Because any overpayments would reduce the total balance, then this would ...


1

From my (limited) experience: either "lend as a friend" with minimal (if any) paperwork, and little or no interest (perhaps a simple fixed sum added to the original amount), or don't do it at all. If you don't know/trust them enough to believe they will do their best to repay (even in the absence of a contract), don't lend. If, because of their ...


1

For the legal jargon I would refer to an online legal document generator. There are many free (or cheap) form generators available that should be sufficient for your needs. But regardless of what the document says, you should only do this if you really trust the person will pay you back. Going to court is a hassle even with a signed agreement, especially if ...


3

You’ve only known this individual for 5 years. I understand that it’s a friend and I’m sure it’s a relationship you care about. But, speaking from experience, (and forgive my frankness) there is absolutely no upside to loaning money to a friend. 10% interest is not worth putting unnecessary stress both on you personally and on the relationship. If you are ...


3

As you have surely realized 10% amounts to less income as the principal remaining on the loan is paid back reducing the lender's overall income. But, you must keep in mind that non-payment is a possibility. Notwithstanding your friend's reliability this friend may get hit by a bus. Generally, you would want to seek a lien on some piece of property for the ...


1

Use excel/LibreOffice function XIRR and then use "Goal seek"


-1

Mathematically a 7K loan with a 10% interest for 5 years would give you $10,500.00. Theoretically, you could equalize the 10.5K payments over 5 years which would come to 175$ / month. This would be the minimum payment that he has to make every month over 5 years that would yield you a 10% interest. On the other hand, if he pays it off sooner, you would ...


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