How much interest am I owed

doyler78_2

I paid some bills for a friend 13 months ago. The cost was £1,240.35 however I have no idea what interest they owe.

I can't find an online calculator that tells you that ie based on daily interest rather monthly.

Anybody able to work this out for me as I haven't a clue. The interest rate on the card is a hefty 24.9%

Thanks

Richard019

If you paid the bills 13 months ago would that mean they appeared on your statement 12 months ago? If that's right would it not mean they just owed you the original amount plus 24.9% in interest.

Given the main balance (including a year's interest) is over £1.5k it seems a bit OTT to be going to daily interest (about £1/day) when it's a friend you're dealing with.

Riq

Seems abit harsh to charge daily, next you'll be going for continual and bringing out the epsilons!! :eek:

YorkshireBoy

It reads to me like the OP has incurred interest at 24.9% APR. If that's the case, why shouldn't their friend pay it?

Riq

Then surely it is easy to work out the total?

YorkshireBoy

Might not be as easy as that, if the OP settled some of the "bills" with cash advances, and also has a revolving purchase balance on their card, but is unable to settle it yet. ie anything repaid by 'friend' will reduce the purchase balance before the cash advance (if any) balance.

doyler78_2

I don't see why asking for the interest which I have paid back again is harsh. I think I was very good to lend the money for a year without hassling for it. The reason I said daily interest is because my credit card statement says that interest is charged on daily basis from it being applied to the account. The items appeared on my march 07 statement and therefore april was when it remained upaid so yes 1 years interest would be correct. I presumed that interest charged on a daily basis would work significantly more than interest charged monthly or yearly as there will be interest on the interest that remains unpaid or is that not correct.

Beyond that I don't know how to go about calculating what it all works out at as I had cash balances during the period therefore I can't just divide my interest for the current month by the amount outstanding in total multiplied by the amount which I orginally lent and then multiplying that by 12 as this would over estimate my friend's interest as it is charged at a higher rate of interest.

I am closing the card out so there will no remaining balances after this as the card's rate is very unattractive and with my excellent credit rating I can do much better.

I can use a calculator however I don't understand how interest and apr are worked out therefore I can do the calculation if you would prefer if someone could point out a decent site that will explain how to do the calculations.

If apr means that over a year then the rate of interest equates to 24.9% then yes I can do that calculation easily:

24.9%*1240.35 = £308.85 which seems extortionate which is why I believed it couldn't be that simple therefore asked here.

Thanks

Wyndham

doyler78 wrote: »

24.9%*1240.35 = £308.85 which seems extortionate which is why I believed it couldn't be that simple therefore asked here.

It is extortionate, because it's a high interest rate! Hopefully this shows you that as well as your friend. There are much cheaper ways to get money and I'm glad you are closing the card and going elsewhere - that is doing the right thing.

As for your friend, it's difficult. Did they know the interest rate when you lent them the money? I can see that if they didn't, they may not be your friend for much longer. It's a personal opinion, of course, but I wouldn't actually lend a friend some money without some sort of written agreement (even if it was only on the back of an envelope) to show the repayments and the time it would take and the interest rate. Not for a tenner, of course, but for an amount like this I would.

doyler78_2

If it is that I will simply go halfers on it as he expecting something in the region of £200 in any case. It's just neither of us expected anything over £300 however he would happily pay that if that was the cost.

He needed some money on holidays therefore this was really his only way of getting any. He was aware that interest was racking up though neither of us was too sure how much hence us arriving at a figure of £200 when it seems we were way under. He has the money to pay it now, as like myself, he has been sorting out his finances.

I took the card out on a promotion several years ago however the rate increased to normal rates and gradually climbed over the period. I just never motivated myself to change it. It was only when I came to put my finances in order I realised just how bad it was.

Riq

Then I don't think it is harsh.
How I read the first post was that you lent your friend the money but paid off the card and therefore wanted interest on the money you lost if it had been in the bank that's all.

That figure would actually be even higher as the APR is caclulated over 12months, not 13 months, only fractionally, but you would need to add on another 1/12th I would say.

However, give me a second and I'll work it out daily.

1623.34 - 1240.34 = £383 based on 13 months at 24.9% daily compounded.

You say the rate has crept up steadily, so actually working it out at 24.9% may be wrong since for maybe 2 months of that it could have been 20% then 2 months at 23% etc etc.

doyler78_2

You had me wondering there but I have just checked and it changed in May 2006 so nothing else to complicate it.

Thanks riq anyway for that calc. Now that it is £383 then I think the original figure of £200 sounds good to me. I will make sure he of course is now just what a generous friend he has. Kudos points out this I guess.