7.0% actually 3.69%?

RG2015

zagfles said:

AmityNeon said:

zagfles said:

AmityNeon said:

zagfles said:

AmityNeon said:

zagfles said:

AmityNeon said:

zagfles said:

There are other examples. Eg

x^2 = y^2.

So logically, x = y, right? Same operation both sides?

No, because the concept of a double negative is still logical. If I owe three people a negative debt of £3 each, it equally means three people each owe me £3. I can go up uphill forwards, or turn my body around and walk backwards (whilst still moving uphill).

That's certainly logical. But I was talking about the general "logical" principle of applying the same operation to both sides of the equation.

What about it? You must apply the same operation to both sides of an equation; that has no relation to forcing logic to somehow deduce that x = y.

OK, using your logic, work out the amount of energy your solar panels would generate on a sunny day. I guarantee you won't be able to do it without using calculus. If you can work out how to use calculus from first principles without being taught it or looking it up, I'll be mighty impressed!

I'm not sure what point you think I made for you to steer this conversation towards calculating the amount of energy solar panels can generate on a sunny day, or how that is relevant to applying the same operations to both sides of an equation to maintain logical consistency.

You seem to be under the impression I believe logic renders maths useless, or something. Logic is simply the basis of maths; you cannot study maths successfully without being a logical and critical thinker. You also don't need to like or study maths to use basic arithmetic and logic to understand personal finance at the consumer level.

Yes you do. That's the point. I've given enough examples where you really do need to have done some study of maths or at least have been taught or looked up mathematical techniques. Unless you really are Einstein and can work all these things out from first principles. How much energy your solar panels generate is a personal finance issue. To work it out, you need calculus. It's an extreme example, but other stuff like drawdown etc does need mathematical techniques which can be taught or looked up. There's no point reinventing the wheel.

I only have a GCSE in maths, which the vast majority of adults also have (or equivalent), and I managed to derive the Regular Saver formula for myself. I just remembered the basic arithmetic and algebra I was taught in school decades ago; I didn't look anything else up, and there was no calculator either. I am no Einstein or child prodigy, or even academically gifted. My career does not involve a related discipline. What I did have, was the attitude that I could probably do it.

Well, exactly! You didn't use "innate logic", you remembered techniques you were taught. That was my point.

I did A-level maths, and I could do more advanced stuff like work out the energy solar panels generate in a day using calculus, because I was taught it, not through "innate logic".

Anyway, best not clog the thread up further, I think other people want to get back on topic!

No worries. I can two things at once. It's only logical. 

surreysaver

TheBanker said:

Nobody has answered my question.

If showing the rate as 7% AER is deceptive, how should the bank describe the interest?

0.01917808% DER

zagfles

OceanSound said:

Albermarle said:

Basically if you have £3600 to save as a lump sum, you would be better just to put it a normal savings account for a one year fix. This FD account is more for people who are regular monthly savers.

Using the drip feed method where you deposit the £3600 in a current account like Kroo then drip feed the monthly payment of £300 in to First Direct Current Account then in to Regular Saver (RS) brings in a higher profit than saving it as a lump sum. 

I checked the moneyfacts website for the highest interest paying place for a 1 year Fixed deposit for £3600. It is Hampshire trust Bank paying 4.91%. So this would be ---> 3600 x 0.0491 = £176.76

However, if using the drip feed method. First Direct RS will pay £136.50 (source: https://www.firstdirect.com/savings-and-investments/savings/regular-saver-account/ ) notice though, if you scroll down the page under key product info it says:

• total deposit at the end of 12 months: £3,600....

• balance at the end of 12 months: £3,726.50

£3,726.50 - £3600  is £126.50. So there appears to be a discrepancy. 

Anyway if we use Kroo current account which pays 3.33%, then for the 12 months the interest works out to be  £58.29. I calculated this figure month by month. e.g. staring off with £3300 (because £300 of the £3600 will be paid in to FD to start with), then every month deducted £300 from the £3300 and worked out the interest every month for the 12 months then added the figures together. 

Now, we add £58.29 to £126.50 (interest from FD RS) and the combined total is £184.79 - which is more than the profit from the 1 year fixed rate. Note this is using the FD RS interest of £126.50 not £136.50. If we use the latter, the profit will be even more. 

BTW, I've a spreadsheet where I use this formula:

=SUM(12*E10)*C10/12*6.5

to calculate the interest from a regular saver. When I plug in the values. i.e. the interest divided by 100 (in this case 0.07) and the monthly deposit amount (in this case 300), it gives me a result of 136.50. 

As another check I then visit: https://www.moneysavingexpert.com/savings/regular-savings-calculator/

and plug in the values, and the result is £135. So, the £136.50 or £135 figure seems correct, not the £126.50. Probably a typo, and the 'balance at the end of 12 months: ' should state £3,736.50.

It'll vary a bit due to different month lengths, weekends etc. £136.50 assumes equal length months and payments going in one the same date every month.

zagfles

surreysaver said:

TheBanker said:

Nobody has answered my question.

If showing the rate as 7% AER is deceptive, how should the bank describe the interest?

0.01917808% DER

No, 0.01853833% DER

Oh, and really should use 366 days in a year as next year is a leap year!

zagfles

RG2015 said:

AmityNeon said:

zagfles said:

AmityNeon said:

zagfles said:

AmityNeon said:

zagfles said:

AmityNeon said:

zagfles said:

There are other examples. Eg

x^2 = y^2.

So logically, x = y, right? Same operation both sides?

No, because the concept of a double negative is still logical. If I owe three people a negative debt of £3 each, it equally means three people each owe me £3. I can go up uphill forwards, or turn my body around and walk backwards (whilst still moving uphill).

That's certainly logical. But I was talking about the general "logical" principle of applying the same operation to both sides of the equation.

What about it? You must apply the same operation to both sides of an equation; that has no relation to forcing logic to somehow deduce that x = y.

OK, using your logic, work out the amount of energy your solar panels would generate on a sunny day. I guarantee you won't be able to do it without using calculus. If you can work out how to use calculus from first principles without being taught it or looking it up, I'll be mighty impressed!

I'm not sure what point you think I made for you to steer this conversation towards calculating the amount of energy solar panels can generate on a sunny day, or how that is relevant to applying the same operations to both sides of an equation to maintain logical consistency.

You seem to be under the impression I believe logic renders maths useless, or something. Logic is simply the basis of maths; you cannot study maths successfully without being a logical and critical thinker. You also don't need to like or study maths to use basic arithmetic and logic to understand personal finance at the consumer level.

Yes you do. That's the point. I've given enough examples where you really do need to have done some study of maths or at least have been taught or looked up mathematical techniques. Unless you really are Einstein and can work all these things out from first principles. How much energy your solar panels generate is a personal finance issue. To work it out, you need calculus. It's an extreme example, but other stuff like drawdown etc does need mathematical techniques which can be taught or looked up. There's no point reinventing the wheel.

I only have a GCSE in maths, which the vast majority of adults also have (or equivalent), and I managed to derive the Regular Saver formula for myself. I just remembered the basic arithmetic and algebra I was taught in school decades ago; I didn't look anything else up, and there was no calculator either. I am no Einstein or child prodigy, or even academically gifted. My career does not involve a related discipline. What I did have, was the attitude that I could probably do it.

Can you share this simple GCSE formula please. Apologies if you have already done this.  

Monthly saving x interest rate/100 x 6.5

So for the FD one 300 x 7/100 x 6.5 = 136.50

It can be different for other banks, eg Nationwide used calendar months, so you could open the account at the end of the month, make a deposit, then deposit again on the first of the next month, and make a total of 13 deposits. So it'd be a bit more with them. But they don't have a RS at the moment AFAIK.

RG2015

zagfles said:

surreysaver said:

TheBanker said:

Nobody has answered my question.

If showing the rate as 7% AER is deceptive, how should the bank describe the interest?

0.01917808% DER

No, 0.01853833% DER

Oh, and really should use 366 days in a year as next year is a leap year!

So why did you use 377 days then (almost) ? I blame the education system.

OceanSound

zagfles said:

OceanSound said:

Albermarle said:

Basically if you have £3600 to save as a lump sum, you would be better just to put it a normal savings account for a one year fix. This FD account is more for people who are regular monthly savers.

Using the drip feed method where you deposit the £3600 in a current account like Kroo then drip feed the monthly payment of £300 in to First Direct Current Account then in to Regular Saver (RS) brings in a higher profit than saving it as a lump sum. 

I checked the moneyfacts website for the highest interest paying place for a 1 year Fixed deposit for £3600. It is Hampshire trust Bank paying 4.91%. So this would be ---> 3600 x 0.0491 = £176.76

However, if using the drip feed method. First Direct RS will pay £136.50 (source: https://www.firstdirect.com/savings-and-investments/savings/regular-saver-account/ ) notice though, if you scroll down the page under key product info it says:

• total deposit at the end of 12 months: £3,600....

• balance at the end of 12 months: £3,726.50

£3,726.50 - £3600  is £126.50. So there appears to be a discrepancy. 

Anyway if we use Kroo current account which pays 3.33%, then for the 12 months the interest works out to be  £58.29. I calculated this figure month by month. e.g. staring off with £3300 (because £300 of the £3600 will be paid in to FD to start with), then every month deducted £300 from the £3300 and worked out the interest every month for the 12 months then added the figures together. 

Now, we add £58.29 to £126.50 (interest from FD RS) and the combined total is £184.79 - which is more than the profit from the 1 year fixed rate. Note this is using the FD RS interest of £126.50 not £136.50. If we use the latter, the profit will be even more. 

BTW, I've a spreadsheet where I use this formula:

=SUM(12*E10)*C10/12*6.5

to calculate the interest from a regular saver. When I plug in the values. i.e. the interest divided by 100 (in this case 0.07) and the monthly deposit amount (in this case 300), it gives me a result of 136.50. 

As another check I then visit: https://www.moneysavingexpert.com/savings/regular-savings-calculator/

and plug in the values, and the result is £135. So, the £136.50 or £135 figure seems correct, not the £126.50. Probably a typo, and the 'balance at the end of 12 months: ' should state £3,736.50.

It'll vary a bit due to different month lengths, weekends etc. £136.50 assumes equal length months and payments going in one the same date every month.

It won't vary by exactly £10 due to different month lengths, weekends etc. 

Btw, I'm presuming you are referring to the discrepancy between £136.50 and £126.50, as your reply didn't say you are referring to the difference between FD RS website (including my spreadsheet formula) £136.50 and MSE website £135.00.

zagfles

RG2015 said:

zagfles said:

surreysaver said:

TheBanker said:

Nobody has answered my question.

If showing the rate as 7% AER is deceptive, how should the bank describe the interest?

0.01917808% DER

No, 0.01853833% DER

Oh, and really should use 366 days in a year as next year is a leap year!

So why did you use 377 days then (almost) ? I blame the education system.

I didn't, I accounted for compounding. 1.07^(1/365) - 1.

AER accounts for compounding so then logically (sorry) should DER. Obviously it doesn't actually compound daily so the DER is lower than nominal divided by 365, because DER should assume daily compounding as AER assumes annual compounding.

(and yes I should have used 366 but didn't think about till afterwards!)

zagfles

OceanSound said:

zagfles said:

OceanSound said:

Albermarle said:

Basically if you have £3600 to save as a lump sum, you would be better just to put it a normal savings account for a one year fix. This FD account is more for people who are regular monthly savers.

Using the drip feed method where you deposit the £3600 in a current account like Kroo then drip feed the monthly payment of £300 in to First Direct Current Account then in to Regular Saver (RS) brings in a higher profit than saving it as a lump sum. 

I checked the moneyfacts website for the highest interest paying place for a 1 year Fixed deposit for £3600. It is Hampshire trust Bank paying 4.91%. So this would be ---> 3600 x 0.0491 = £176.76

However, if using the drip feed method. First Direct RS will pay £136.50 (source: https://www.firstdirect.com/savings-and-investments/savings/regular-saver-account/ ) notice though, if you scroll down the page under key product info it says:

• total deposit at the end of 12 months: £3,600....

• balance at the end of 12 months: £3,726.50

£3,726.50 - £3600  is £126.50. So there appears to be a discrepancy. 

Anyway if we use Kroo current account which pays 3.33%, then for the 12 months the interest works out to be  £58.29. I calculated this figure month by month. e.g. staring off with £3300 (because £300 of the £3600 will be paid in to FD to start with), then every month deducted £300 from the £3300 and worked out the interest every month for the 12 months then added the figures together. 

Now, we add £58.29 to £126.50 (interest from FD RS) and the combined total is £184.79 - which is more than the profit from the 1 year fixed rate. Note this is using the FD RS interest of £126.50 not £136.50. If we use the latter, the profit will be even more. 

BTW, I've a spreadsheet where I use this formula:

=SUM(12*E10)*C10/12*6.5

to calculate the interest from a regular saver. When I plug in the values. i.e. the interest divided by 100 (in this case 0.07) and the monthly deposit amount (in this case 300), it gives me a result of 136.50. 

As another check I then visit: https://www.moneysavingexpert.com/savings/regular-savings-calculator/

and plug in the values, and the result is £135. So, the £136.50 or £135 figure seems correct, not the £126.50. Probably a typo, and the 'balance at the end of 12 months: ' should state £3,736.50.

It'll vary a bit due to different month lengths, weekends etc. £136.50 assumes equal length months and payments going in one the same date every month.

It won't vary by exactly £10 due to different month lengths, weekends etc. 

Btw, I'm presuming you are referring to the discrepancy between £136.50 and £126.50, as your reply didn't say you are referring to the difference between FD RS website (including my spreadsheet formula) £136.50 and MSE website £135.00.

No probably less than £1 or so, just making the point the figure won't be exact.

OceanSound

zagfles said:

OceanSound said:

zagfles said:

OceanSound said:

Albermarle said:

Basically if you have £3600 to save as a lump sum, you would be better just to put it a normal savings account for a one year fix. This FD account is more for people who are regular monthly savers.

Using the drip feed method where you deposit the £3600 in a current account like Kroo then drip feed the monthly payment of £300 in to First Direct Current Account then in to Regular Saver (RS) brings in a higher profit than saving it as a lump sum. 

I checked the moneyfacts website for the highest interest paying place for a 1 year Fixed deposit for £3600. It is Hampshire trust Bank paying 4.91%. So this would be ---> 3600 x 0.0491 = £176.76

However, if using the drip feed method. First Direct RS will pay £136.50 (source: https://www.firstdirect.com/savings-and-investments/savings/regular-saver-account/ ) notice though, if you scroll down the page under key product info it says:

• total deposit at the end of 12 months: £3,600....

• balance at the end of 12 months: £3,726.50

£3,726.50 - £3600  is £126.50. So there appears to be a discrepancy. 

Anyway if we use Kroo current account which pays 3.33%, then for the 12 months the interest works out to be  £58.29. I calculated this figure month by month. e.g. staring off with £3300 (because £300 of the £3600 will be paid in to FD to start with), then every month deducted £300 from the £3300 and worked out the interest every month for the 12 months then added the figures together. 

Now, we add £58.29 to £126.50 (interest from FD RS) and the combined total is £184.79 - which is more than the profit from the 1 year fixed rate. Note this is using the FD RS interest of £126.50 not £136.50. If we use the latter, the profit will be even more. 

BTW, I've a spreadsheet where I use this formula:

=SUM(12*E10)*C10/12*6.5

to calculate the interest from a regular saver. When I plug in the values. i.e. the interest divided by 100 (in this case 0.07) and the monthly deposit amount (in this case 300), it gives me a result of 136.50. 

As another check I then visit: https://www.moneysavingexpert.com/savings/regular-savings-calculator/

and plug in the values, and the result is £135. So, the £136.50 or £135 figure seems correct, not the £126.50. Probably a typo, and the 'balance at the end of 12 months: ' should state £3,736.50.

It'll vary a bit due to different month lengths, weekends etc. £136.50 assumes equal length months and payments going in one the same date every month.

It won't vary by exactly £10 due to different month lengths, weekends etc. 

Btw, I'm presuming you are referring to the discrepancy between £136.50 and £126.50, as your reply didn't say you are referring to the difference between FD RS website (including my spreadsheet formula) £136.50 and MSE website £135.00.

No probably less than £1 or so, just making the point the figure won't be exact.

Oh! I see. So, the FD website £10 discrepancy is a typo?