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Which is better?
MX5huggy
Posts: 7,173 Forumite
I can pay £270 up front but get 1% cash back.
or pay £30 a month for 9 months with no cash back leaving the unspent money earning 5.1%
Which is the better strategy?
or pay £30 a month for 9 months with no cash back leaving the unspent money earning 5.1%
Which is the better strategy?
0
Comments
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You will earn more that £2.70 if you have £240 earning interest for a month. Then £210 for a month, £180 for a month and so on.
You may well double your money.1 -
240 * (5.1%/12) + ... + 30 * (5.1/12) [eight of these]
= 270 * (5.1%/12) * 4
=270 * 1.7%
which is 0.7% of £270 more than 1%, or £1.89.1
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