Working Process of Interest?

[DeansLane]

Hi....

I have doubt in working process of interest.

Suppose that,if you get 4% of how much money you have in the bank every year.So if you have 10000 in your bank you get 4000 back every year, correct?

Additional details ....

I make half that daily. I'd get WAY more interest if I had my money in a bank.

[KTP]

I have doubt in your math skills

Just teasing.

If you have $10,000 in the bank at 4% APY interest (which bank has that!), you would get $400 a year, not $4000

May I inquire what job you have that pays you $2000 a day though?

[woodie96]

I want a job working there....NOOO DOUBT.....

[dczech09]

Dean, your original post does not make any sense whatsoever.

First of all, 4% of $10,000 is only $400 a year which is $1.095 per day.

Then you said that you make half of $4,000 in a day, which is $2,000. For some reason I doubt that you're a business executive... just teasing like the others

But then you said you would make more money if you had more in the bank? This all seems contradictory. What is this "working process of interest" that you doubt? Why do you doubt it? Its all pretty clear cut and boiler plate.

[jpg7n16]

Originally Posted by DeansLane

I have doubt in working process of interest.

Interest is essentially the price of money.

Look at food. If you need food, you go to the store and pay someone a price for food. If you are a farmer, you take your food to the store and sell it to others for a price.

The same thing happens on money. If you need money, you go to the store and pay someone the price of money (interest rate on debt, CCs, student loans, mortgage, car loan, etc.). You needed money, and you are 'buying' it from some lending company at a price. But what if you aren't buying, but are selling?? Now YOU get to charge interest for someone else to use your money. The bank pays you to keep your money with them, so that they can in turn loan it out to others and make more than they pay you. If you don't like what they are paying you at one place, you can take it to another buyer who's willing to pay more.

Or you can let a business borrow your money and charge them interest (bonds) or buy a portion of the ownership and therefore keep some of the profits (stock).

I make half that daily.

Of course you will make more by labor than by charging someone to borrow your money. Until you're lending out so much that you make a ton on interest alone.

Businesses will pay more for labor than for cash.

I'd get WAY more interest if I had my money in a bank.

Why do you feel that way? Where do you have your money now?