Wrong calculation of interset?

derrick

Lokolo wrote: »

Because a year is 365.25 long. That way, every 4 years theres an extra day.

So (365+365+365+366)/4, to get average days in a year is 365.25.

Yep, OK, but it still won't work, and to my knowledge they don't base on .25 days.

Lokolo

derrick wrote: »

Yep, OK, but it still won't work, and to my knowledge they don't base on .25 days.

Yeh I don't know anyone that does. Yorkshire knows more than me

sloughflint

derrick wrote: »

Yes but multiplying the correct figure, £7010 would give you £10515, which is the figure I maintain I should have received, but only got £10502.95

They explained to you how the figure was reached.
150000*0.0701*( 153/366+212/365)=£10502.95 gross.

Hungerdunger wrote: »

Can anyone explain this?

Was your roll-over starting balance exactly 100k? Are you sure the start date was the same?

YorkshireBoy

sloughflint wrote: »

They explained to you how the figure was reached.
150000*0.0701*( 153/366+212/365)=£10502.95 gross.

Yes, but according to the BBA code of practice...

"Where an interest rate is calculated on a basis other than actual/365, the basis should be stated and the AER should nonetheless be calculated on an actual/365 basis."

The Derbyshire haven't stated anywhere in the account T&C's that they were using a 366 day year in part.

That has to form the basis of Derrick's complaint to The Derbyshire/FOS.

sloughflint

YB, I'm just clarifying the calculation what with all this sudden talk of 365.25.

What a thread.

derrick

YorkshireBoy wrote: »

Yes, but according to the BBA code of practice...

"Where an interest rate is calculated on a basis other than actual/365, the basis should be stated and the AER should nonetheless be calculated on an actual/365 basis."

The Derbyshire haven't stated anywhere in the account T&C's that they were using a 366 day year in part.

That has to form the basis of Derrick's complaint to The Derbyshire/FOS.

In their T&Cs booklet they do state; - "The amount of interest you will receive can be calculated by taking the amount in the account at the start of the day, multiplying by the interest rate applying to the account divided by 100, then dividing by 365, (except in a leap year when it is divided by 366). i.e. using the following formula;

Balance at the start of the day x (the interest rate/100) = the interest rate for that day
________________________________________
365(or 366 in a leap year)"

But that is not in the leaflet!


The following is from the BBA site; -
"Actual/365 means that interest is calculated by taking the balance multiplied by the annual interest rate divided by 100, multiplied by the number of calendar days that the balance is held, divided by 365 in a normal year or by 365 or 366 days in a leap year. If making an adjustment for AER purposes, the divisor should be 365 in all years."


However my point is that irrespective of leap years, they had my money from 1st August to 31st July inclusive and that is 365 days, 12 months, or as the bond leaflet says,"1 year fixed rate bond", (the extra day for 2008 leap year was in February, 5 months before the start of the bond!), so why should they be allowed to calculate interest on 366 days?

Lokolo

derrick wrote: »

In their T&Cs booklet they do state; - "The amount of interest you will receive can be calculated by taking the amount in the account at the start of the day, multiplying by the interest rate applying to the account divided by 100, then dividing by 365, (except in a leap year when it is divided by 366). i.e. using the following formula;

Balance at the start of the day x (the interest rate/100) = the interest rate for that day
________________________________________
365(or 366 in a leap year)"

But that is not in the leaflet!


The following is from the BBA site; -
"Actual/365 means that interest is calculated by taking the balance multiplied by the annual interest rate divided by 100, multiplied by the number of calendar days that the balance is held, divided by 365 in a normal year or by 365 or 366 days in a leap year. If making an adjustment for AER purposes, the divisor should be 365 in all years."


However my point is that irrespective of leap years, they had my money from 1st August to 31st July inclusive and that is 365 days, 12 months, or as the bond leaflet says,"1 year fixed rate bond", (the extra day for 2008 leap year was in February, 5 months before the start of the bond!), so why should they be allowed to calculate interest on 366 days?

Because the year 2008 was a leap year. Just because you start something after the extra day, doesn't mean that the year then wasn't a leap year. Who decided that the extra day should be in February? Its not about February, its about the year, and the year has an extra day in it. So for the whole of 2008, interest is calculated as 366.

You won't get anywhere as it does state 366 and 365 rules in the T&Cs.

bendix

could I suggest a whip-round for derrick? we should be able to raise the tenner between us, I'm sure.

do people talk to you much in pubs?

derrick

Lokolo wrote: »

Because the year 2008 was a leap year. Just because you start something after the extra day, doesn't mean that the year then wasn't a leap year. Who decided that the extra day should be in February? Its not about February, its about the year, and the year has an extra day in it. So for the whole of 2008, interest is calculated as 366.

You won't get anywhere as it does state 366 and 365 rules in the T&Cs.

T&Cs are not always lawful, (see bank charges), you are entitled to your opinion, as am I, they had it for 1 year as per their leaflet,therefore they should pay up 1 years interest, it seems to me that they are trying to get away with keeping savers monies, if it had bee 366 days they had my money why should I not be claiming an extra day as they would gain interest for 366 days!

We will see what the FSO say!

derrick

bendix wrote: »

could I suggest a whip-round for derrick? we should be able to raise the tenner between us, I'm sure.

do people talk to you much in pubs?

Nobody asked you to read or respond, if you don't like the thread go read another one, this is an open forum money saving site, not one where we should allow these companies to rip us off!