4 ms·

No it wasn't robin hood, it was just basic rates charged by another firm. I figured robin hood is going to charge the industry standard. But that 2.4 % interes

by vivekd 9y ago

No it wasn't robin hood, it was just basic rates charged by another firm. I figured robin hood is going to charge the industry standard. But that 2.4 % interest rate is being charged daily on those loans so that's even scarier.

morgante 9y ago
Uh, I think you don't understand how compounding works. It's not 2.4% a day. Do you know anything about finance?
- vivekd 9y ago
  from the link >IB accrues interest on a daily basis and posts actual interest monthly on the third business day of the following month. from investopedia >Interest accrues on loans, such as a mortgage, or on savings accounts and investments. Daily accrual means interest amounts are added to the account balance every day. Interest can accrue on any time schedule; common periods include daily, monthly and annually it would be different if the rates were annual percentage rates, but your site doesn't specify that. no I don't know anything about finance but I got google.
  - morgante 9y ago
    A little knowledge is dangerous. You found the right terms but totally missed the meaning. Daily accrual means that your interest for that day is calculated daily. It doesn't mean the interest rate is 2.4% a day. Did you even think about this logically? 2.4% a day would be 876% a year. That's obviously insane.
    - sobani 9y ago
      2.4% a day would be 574756% a year (yes 5747 fold). Compound interest FTW! (or For The Bankruptcy in this case)
presto8 9y ago
Interest rates are almost always annualized and cited in terms of APR or Annual Percentage Rate. If the APR is not cited, then it is implied. This makes it easier to compare loans even if they have different terms. The fine print will usually provide the daily interest rate, for example 2.00% APR is 2/365 = 0.005479% per day interest. Often interest is compounded continuously in which case calculus can be used to compute the exact interest, but it ends up as a famous formula in investing, FV = PV * e^(R*T). In practice, it ends up being very close to daily compounding, but it allows banks to advertise an ever-so-slightly higher APY (annual percentage yield) which is why everybody does it this way for interest paid on deposit accounts.

by vivekd 9y ago

morgante 9y ago

Uh, I think you don't understand how compounding works. It's not 2.4% a day. Do you know anything about finance?

vivekd 9y ago
from the link >IB accrues interest on a daily basis and posts actual interest monthly on the third business day of the following month. from investopedia >Interest accrues on loans, such as a mortgage, or on savings accounts and investments. Daily accrual means interest amounts are added to the account balance every day. Interest can accrue on any time schedule; common periods include daily, monthly and annually it would be different if the rates were annual percentage rates, but your site doesn't specify that. no I don't know anything about finance but I got google.
- morgante 9y ago
  A little knowledge is dangerous. You found the right terms but totally missed the meaning. Daily accrual means that your interest for that day is calculated daily. It doesn't mean the interest rate is 2.4% a day. Did you even think about this logically? 2.4% a day would be 876% a year. That's obviously insane.
  - sobani 9y ago
    2.4% a day would be 574756% a year (yes 5747 fold). Compound interest FTW! (or For The Bankruptcy in this case)

presto8 9y ago

Interest rates are almost always annualized and cited in terms of APR or Annual Percentage Rate. If the APR is not cited, then it is implied. This makes it easier to compare loans even if they have different terms. The fine print will usually provide the daily interest rate, for example 2.00% APR is 2/365 = 0.005479% per day interest. Often interest is compounded continuously in which case calculus can be used to compute the exact interest, but it ends up as a famous formula in investing, FV = PV * e^(R*T). In practice, it ends up being very close to daily compounding, but it allows banks to advertise an ever-so-slightly higher APY (annual percentage yield) which is why everybody does it this way for interest paid on deposit accounts.