How much to repay to family member

riverboat2001

Simply put, years ago a family friend very kindly lent me some money.

It was 5K about 8 years ago.

I have just paid them back the 5k, but would like to pay them back some more as a thank you.

If this money had been put in a savings account, how much interest would they have earnt?

Many Thanks

shortchanged_2

At the current interest rates about £5 :rotfl:


No seriously it is a difficult question to answer as interest rates would have fluctuated over the years.

1% of the £5000 would equate to £50 so you could say 2% would pay £100 a year, 3% £150 a year and so forth.

I suppose it depends on what your family friends are like. I can't remember exactly what bank interest savings rates have been over the past few years but I don't remember them being particularly high probably never much more than 6%.

Personally I would probably work on around 2.5 to 3% as a reasonable average therefore the equivalent of around £150 a year, though this would increase slightly year on year. (Also bearing in mind they haven't paid any tax on these savings over the years)

If you think that may be a lot, just remember if you had a personal loan over that period you would have been very lucky to get a rate much better than 6.5%.

So to be honest to answer your question the best thing is to see what interest rates were over the past couple of years and work it out from there and again it depends on how generous your family friends are.

zppp

I would buy them a really nice gift, or some gift vouchers as a big thank you.

riverboat2001

I was thinking about £350, but it just doesn't seem that much!
Perhaps some Mothercare Vouchers too.

Cheers

MFWannabe

riverboat2001 wrote: »

I was thinking about £350, but it just doesn't seem that much!
Perhaps some Mothercare Vouchers too.

Cheers

Sounds pretty good amount to me. You have a very good friend there.

:A

shortchanged_2

riverboat2001 wrote: »

I was thinking about £350, but it just doesn't seem that much!
Perhaps some Mothercare Vouchers too.

Cheers

As I don't know your family friends I don't really know what they want, just bear in mind they potentially have lost a fair bit of interest over the years.

Also I would say don't bother with the vouchers, if you were going to give me something back personally I would prefer cash.

Vouchers can be very limiting with their worth. i.e why force them to spend their money in mothercare when they can make a decision whether to spend it there or somewhere else if they so wish.