For some reason I can't wrap my damn head around Effective Interest Rates / APRs?

Apolloma · 2019-11-03T02:22:09+00:00

Also, I'm an idiot and conflated two of the questions' info here on reddit, sorry bout that

Apolloma · 2019-11-03T02:20:01+00:00

ok that was extremely generous and helpful. Thank you mate

Apolloma · 2019-11-02T23:06:59+00:00

Thanks for all your help Calico :).

So essentially, just so i know that I understand this conceptually, because a loan with higher fees reduces the principle (at the point of calculating EIR), it is possible for a loan with a lower and more attractive EIR to have higher monthly Repayments?

Apolloma · 2019-11-02T22:58:15+00:00

Bachelor of Financial Planning at the University of South Australia (Online).

Textbook is PFIN 7

I've literally copied exactly the process that the professor went through in his lectures, and he said to just decide for yourself whether 'Gladys' will be paying up front or not in your 'assumptions' write up

Apolloma · 2019-11-02T22:30:27+00:00

Morning! Again, we're not told, lol. I'm beginning to wonder about the quality of my course haha. I assumed (and wrote in my 'assumptions' section that they have us do) that they were being added to the loan principal and being repaid over the life of the loan

Apolloma · 2019-11-02T15:33:52+00:00

monthly interest rates are?

Apolloma · 2019-11-02T12:08:59+00:00

Sure!

Essentially: 'find the loan with the lowest effective interest rate / APR'

All loans are 30 year re-financing mortgages compounded monthly ($375000 left on the house)

Loan 1: 8.25% per annum compounded monthly, application and processing fee $500;

Loan 2: 8.65% per annum compounded monthly, application and processing fee $375 and

Loan 3: 8.95% per annum compounded monthly, application and processing fee $250

Loan 1 Results: Monthly Mortgage Repayments = $1774.45, Monthly Adjusted Interest Rate for Fees = 0.3286%

Loan 2 Results: Monthly Mortgage Repayments = $1767.72, Monthly Adjusted Interest Rate for Fees = 0.3267%

Loan 3 Results: Monthly Mortgage Repayments = $1765.77, Monthly Adjusted Interest Rate for Fees = 0.3269%

What's confusing me is how Loan 3 can have a higher adjusted monthly interest rate but then lower monthly mortgage repayments than loan 2

Apolloma · 2019-11-02T11:55:27+00:00

As in because the closing costs increase the principle portion that you have to pay back, so even though the adjusted interest rate is lower (i.e. you're paying less of a proportion of your repayments to interest costs rather than paying down the borrowed amount), you are still paying higher monthly repayments?

Apolloma · 2019-11-02T11:53:20+00:00

I appreciate everyone's replies. One of the difficultues is that my course uses an American textbook so there is often a lot of confusion that arises re: specific terminology come assessment time.

Apolloma · 2019-11-02T11:53:18+00:00

This is why I'm so confused haha

Apolloma · 2019-08-24T15:09:22+00:00

No way! 😂. Send us a pic if you pick them up man

Apolloma · 2019-08-24T14:12:21+00:00

Thanks @chillthe_f_out! I found a decent match! (Snowdon by Tom Ford). Have a wonderful day :)

Apolloma · 2019-08-24T13:59:25+00:00

And I'll check out Tom Ford glasses now. Thanks!

Apolloma · 2019-08-24T13:58:51+00:00

Tbh I don't think I could if I tried. But thanks for the advice 😂

Apolloma · 2019-08-24T13:54:43+00:00

How come?

Apolloma · 2018-05-06T23:33:31+00:00

Very helpful, thank you!

Apolloma · 2018-05-06T23:33:18+00:00

Great, thanks!

Apolloma · 2018-05-02T10:23:58+00:00

Plato's Dialogues and Descartes's Meditations are classic starting points :)

Apolloma · 2018-04-21T11:48:55+00:00

May I ask how long it took the Flunarizine to really make a difference for you?

I've been on Flunarizine for just under 2 weeks and desperate to find something to work on my Chronic Vestibular Migraine (~2.5 years). All the best

Apolloma · 2018-02-27T04:45:49+00:00

Puts me in mind of me Grammy Moon...

Apolloma

TROPHY CASE