Confused about interest earned....

Essenchill

Will look back at the account later on when I get chance, but I do know it appeared to all make perfect sense when I checked it the other day and realised I'd withdrawn the money in April. I will add another reply with why I think it makes sense (or if I change I mind) later on!

Essenchill

OK, I'm officially confused again now. I thought it all made sense. I had decided that as May was a longer month it explained why the June interest was less.

But now I'm thinking if money was withdrawn in April, and a third of this was paid back at the end of April, April should have been a low month for interest?

Interest paid in May would be more as it was a whole month with slightly more in the account than April and also had the interest earned in April on top.

So June should still, logically, be higher than May as although there are less days in May there is again the addition of the interest earned in May adding to the total amount in the account.

In essence, YorkshireBoy is right, it doesn't explain why June is less than May. The one day difference in length should be cancelled out?

For reference, the interest is paid on the last day of the month, so interest is earned throughout the month in question, not throughout the previous month...

LucyTheDwarf

I think you should phone them. My head's about to burst just thinking about it.

Good luck!

Oblivion

LucyTheDwarf wrote: »

I think you should phone them. My head's about to burst just thinking about it.

Good luck!

Oh no! I can feel a phone bill thread coming on. :rotfl:

Dave.

YorkshireBoy

Essenchill wrote: »

But now I'm thinking if money was withdrawn in April, and a third of this was paid back at the end of April, April should have been a low month for interest?

Every time you post you seem to throw another little snippet in!

If it's not too personal a question, why not post your account activity and let us work it out for you? That way, at least you'll be better prepared for your phone call.

Essenchill

I know I keep adding a 'snippet' in each time and I'm sorry about it, I guess I'm such a huge fool that I didn't think those factors (money out in April and a bit back in also in April) had any factor at first, and now I'm back at the conclusion that really, they don't.

The main query now is why May and June differ with no (honestly, no) account activity and the only variable being 31 days in May and 30 days in June.

I will ring them tomorrow, I didn't get chance tonight and from what I've read elsewhere they are friendly and helpful so hopefully they will say "Ah, but you haven't thought of..." and it will all click into place. I will obviously now, very red faced as I already am, reply to the thread with the end result and reason.

I'm sorry I've made other people's heads hurt as much as mine did about 30 mins ago!

Essenchill

After a 5 min phone call I have the result and it was as I had thought before I got confused again...

June is lower simply due to it being a shorter month than May, the April figure confuses the issue and should be ignored - as it takes into account the account balance before the withdrawl of funds and repayment of a bit of those funds...

sloughflint

Essenchill wrote: »

After a 5 min phone call I have the result and it was as I had thought before I got confused again...

June is lower simply due to it being a shorter month than May, the April figure confuses the issue and should be ignored - as it takes into account the account balance before the withdrawl of funds and repayment of a bit of those funds...

Well I'm confused still.
I've tried to work backwards and figure out your capital at start of May and use that to work out the end of June interest.

Essenchill wrote: »

Can't do it in ratios (or don't think I can so aren't going to attempt it!) but basically:
April: £5.49
May: £5.88
June: £4.64

Hope this helps in some way or form?

I get £5.71 for end of June not £4 odd.:

0.0631x30x0.8/365x ( 5.88x365/(0.0631x31x0.8)+5.88)

YorkshireBoy

sloughflint wrote: »

Well I'm confused still.

Me too!...and I agree with your £5.71 figure for June.

Assuming the £5.88 was correct for May (can we?), then the opening balance for May was...

(£5.88 x 1.25) / 31 x 365 / 6.31 x 100 = £1,371.48

June's opening balance was therefore...

£1,371.48 + £5.88 = £1,377.36

June's interest should therefore be...

£1,377.36 x 6.31% / 365 x 30 x 0.8 = £5.71

Essenchill

Interesting (no pun intended honest!). I guess I will just have to see what happens at the end of this month...