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credit intrest on intrest
I have a loan in a bank that functions as a combination of checking
account, house-loan (example 1.000.000 house loan) and credit, much like a credit card credit, but i pay interest on the used money from the day i spend them. It has a credit limit and no mortage. I try to compare this loan to a regular loan, with mortage-payments and interest. Since I use the loan as an account I will get several small increases in debt, in addition to the loan of a million, during the month, all with different interest dates which will together be the basis for the calculation of my interest payment for the month payable the last day of the month. My salary (for example 40.000) will go into the account on the 20.th of each month, which will reduce the debt (and off course interest). The interest (3,8%) is calculated day by day (a purchase I have done the first of the month will have 31 days of interest, while a purchase i do the 31st will only have one day of interest. An example of purchases on different days in the month below. How do I compose a formula for calculating interest and interest on interest day by day on this loan, and get a monthly cost for it, så i can compare? 1 1000,0 2 1000,0 6 1000,0 7 30,2 10 503,7 13 526,8 15 20,6 16 538,2 19 33,0 20 11515,1 +salary 40000 21 249,6 23 6383,0 24 883,6 26 594,5 27 32,1 28 369,0 29 5054,7 30 1090,0 31 20,4 |
#2
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credit intrest on intrest
"Per Carlsson" wrote:
I have a loan in a bank that functions as a combination of checking account, house-loan (example 1.000.000 house loan) and credit, much like a credit card credit, but i pay interest on the used money from the day i spend them. [....] How do I compose a formula for calculating interest and interest on interest day by day on this loan, and get a monthly cost for it That sounds like a "line of credit", although it might be called something else in your country. You will not be able to compute a "fixed monthly payment", as you might with a regular mortgage. So it is unclear to me how you would make a comparison. (You might simulate a scheduled of variable withdrawals and deposits and compute total interest charged over some period of time.) In any case, the devil is the details. There are many different ways that banks can account for and charge accrued interest. I worked with one individual some time ago. Eventually, he got a schedule of daily balances and accrued interest covering 2-3 months based on actual activity in his account. The bank showed the amount of daily and accrued interest and when the interest was paid to the account. That allowed me to intuit how the bank computed interest. Download the file "line of credit.xls" from https://www.box.com/s/415a2d89ccaafb7ebbbb. Note that this example is based on that person's bank loan. Your bank loan might work differently in some detail. But hopefully the example will give you some idea of the kind of calculations to make and the questions you need to ask your bank. Note: In the US and perhaps other countries, lenders are required to provide a "disclosure statement" that should explain how interest accrues and is charged to the account. However, verbal explanations can be confusing. I would still ask for a schedule of daily activity from a bank to demonstrates the detailed mechanics of interest computation. For that example, simple interest accrues through the 3rd of each month. It is added to the account balance on the 4th of each month. Thus, it compounds monthly. Daily simple interest is calculated as follows: the previous balance times the previous annual rate times the number of days since the previous balance divided by 365. ----- original message ----- "Per Carlsson" wrote in message ... I have a loan in a bank that functions as a combination of checking account, house-loan (example 1.000.000 house loan) and credit, much like a credit card credit, but i pay interest on the used money from the day i spend them. It has a credit limit and no mortage. I try to compare this loan to a regular loan, with mortage-payments and interest. Since I use the loan as an account I will get several small increases in debt, in addition to the loan of a million, during the month, all with different interest dates which will together be the basis for the calculation of my interest payment for the month payable the last day of the month. My salary (for example 40.000) will go into the account on the 20.th of each month, which will reduce the debt (and off course interest). The interest (3,8%) is calculated day by day (a purchase I have done the first of the month will have 31 days of interest, while a purchase i do the 31st will only have one day of interest. An example of purchases on different days in the month below. How do I compose a formula for calculating interest and interest on interest day by day on this loan, and get a monthly cost for it, så i can compare? 1 1000,0 2 1000,0 6 1000,0 7 30,2 10 503,7 13 526,8 15 20,6 16 538,2 19 33,0 20 11515,1 +salary 40000 21 249,6 23 6383,0 24 883,6 26 594,5 27 32,1 28 369,0 29 5054,7 30 1090,0 31 20,4 |
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