how much interest is he making?


J

Jenny

Hi my partner owes £900 that he is paying off at £30 a month. This is
annoying me as he has the £900 in the bank and he could pay it all off in
one go.

Also it is me who has to make the payment for him every month and that means
that for the next 30 months I have go to an office and pay the money. I have
been doing this for the past year (£900 is what is left to pay) and this is
beginning to piss me off

So assuming he is making 6% APR gross interest on this money in his high
interest bank account how much interest will he be actually making?

So how do I work out, starting with £900, making 6% APR gross interest and
withdrawing £30 per month what he will make? And if it is not all that much
I will give him the money to save me making a bus trip (free) every efin
month?

Thanks Jennie
 
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C

Colin Wilson

Also it is me who has to make the payment for him every month and that means
that for the next 30 months I have go to an office and pay the money. I have
been doing this for the past year (£900 is what is left to pay) and this is
beginning to piss me off
(I'm crap at finances, so feel free to ignore this !)

God, I can imagine !
So assuming he is making 6% APR gross interest on this money in his high
interest bank account how much interest will he be actually making?
Is he paying interest on the outstanding amount ? - if so, this will
almost certainly be costing him money in the long run, as he'll be
paying compound interest over the next 30 months on the outstanding...
So how do I work out, starting with £900, making 6% APR gross interest and
withdrawing £30 per month what he will make? And if it is not all that much
I will give him the money to save me making a bus trip (free) every efin
month?
Sod that, tell him to set up a standing order, pay it off in one go,
or do the bloody running around himself - I wonder how quickly he'll
tire of the trip into town when he can't offload it onto you ?
 
G

Gareth

Jenny said:
Hi my partner owes £900 that he is paying off at £30 a month. This is
annoying me as he has the £900 in the bank and he could pay it all off in
one go.

Also it is me who has to make the payment for him every month and that means
that for the next 30 months I have go to an office and pay the money. I have
been doing this for the past year (£900 is what is left to pay) and this is
beginning to piss me off

So assuming he is making 6% APR gross interest on this money in his high
interest bank account how much interest will he be actually making?

So how do I work out, starting with £900, making 6% APR gross interest and
withdrawing £30 per month what he will make? And if it is not all that much
I will give him the money to save me making a bus trip (free) every efin
month?

Thanks Jennie
I would say about 70 quid gross, assuming he isn't paying any interest
on the debt.

6% APR ~ 0.5% per month (I'm not sure exactly how banks compound it, but
the difference wont be much). He gets 30 months interest on the last 30
quid, 29 months on the second to last etc.

If he pays tax then you need to take 20% (or 40% for higher rate) off
this, which is probably about the same as your bus fair?

Can't he set up a Direct Debit or Standing Order?
 
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R

Roger Mills

In an earlier contribution to this discussion,
Jenny said:
Hi my partner owes £900 that he is paying off at £30 a month. This is
annoying me as he has the £900 in the bank and he could pay it all
off in one go.

Also it is me who has to make the payment for him every month and
that means that for the next 30 months I have go to an office and pay
the money. I have been doing this for the past year (£900 is what is
left to pay) and this is beginning to piss me off

So assuming he is making 6% APR gross interest on this money in his
high interest bank account how much interest will he be actually
making?
So how do I work out, starting with £900, making 6% APR gross
interest and withdrawing £30 per month what he will make? And if it
is not all that much I will give him the money to save me making a
bus trip (free) every efin month?

Thanks Jennie
You can do a rough calculation like this . .
He currently has £900, but after 30 months will have £0 - so the *average*
amount he will have is £450.

£450 at 6% yields £27 p.a gross, or £67.50 over 2.5 years. Assuming he is a
standard rate taxpayer, this will be taxed at 20% - so the total net amount
is around £54. So each of your 30 trips will save him less than £2!
--
Cheers,
Roger
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