IRD or Interest Rate Deferential is a formula the banks use to calculate mortgage penalty if you decide to break the mortgage with your current lender. The IRD formula is used in a case where the current posted rates are lower then your mortgage rate. This is done in order to have a bigger penalty if you are breaking your mortgage for a better rate.

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They say there are severe penalties and such, but the banks seem reluctant to give information on exactly what that penalty is and how they calculate it. its like some kind of secret. does anyone know?

It is usually in the fine print, but a bank has to tell you how the penalty is assessed. Usually, for a one-year CD, the penalty is 90 days of interest...basically, the amount of interest you would have earned if you had held the CD to maturity. Not a problem if you have already earned 90 days of interest, you simply lost that earning...but if you haven't yet earned the 90 days worth, the will do what's called "invading the principal"...essentially taking away some of what you initially invested. I have seen other penalties assessed, fees for early transfer and such, but the interest-based fee is by far the most common...a little tip, by the way. If you have a decent relationship with your bank, and go in person to the bank to request the early CD cash-in, and sweet-talk them a little, they can and sometimes will waive the fee. The key is to get them to think you will continue to bank with them, and buy more CD's in the future.

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Say one invest rs.100,000 in bank td on 23rd sep 2010 now if today he want tp prematurely withdraw it how much penalty he have to pay? the bank rate of penalty is "1.00% penal interest will be levied".

actual no of days the deposit was with the bank and rate of interest for that much no of days minus one percent as levy

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less than the minimum balance on any day of the month will be penalised, that is minimum on 30th of the month will be penalised and the same on 1st of the next month (next day) will also be penalised.

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2)you have an installment loan of $1,500 for 12 months and 5% annual interest.find the monthly payment and the cost of the loan(interest charge) a)$101.25 monthly b)$111.25 monthly c)$121.25 d)$131.25 monthly $54.50 interest $64.50 interest $54.50 interest $75.00 interest 3)a card charges a minimum of $10.00 or 2% of the outstanding balance.your outstanding balance is $400.what must you pay? a)$8.00 b)$10.00 c)$400.00 d)$20.00 4)your unpaid balance is $2,750.your card has a minimum of $10.00 or 2% of the outstanding balance.what must you pay? a)$10.00 b)$55.00 c)$27.50 d)$15.00 5)you have an installment loan of $2,700 for 30 months and 12% annual interest.calculate the monthly payment . a)$140.49 b)$104.94 c)$104.49 d)$150.00 6)there a penalty for withdrawing money form a cd before the end of the specified period. a)true b)false 7)cd's earn interest that is compounded. a)true b)false 8)when you buy a stock there is no charge.you are only charged when you sell. a)true b)false 9)you invested $1,800 at 7% daily for 4 years.what is the interest paid? a)$518.57 b)$581.57 c)$681.57 d)$618.57

use the Pearson's chi square test

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Hi all, i wanted to ask whether the following mortgage commitment i received from a small bank is reasonable or completely wrong(?) the mortgage commitment includes the following statement: "the loan balance upon maturity (5 years), with all interest, charges and accessories, shall become due and payable on that date…. the mortgage will become due and payable in 60 months at which time the borrower, if all payments are made on the due date and any prepayment privilege is not used, will owe $155,000" (i rounded). however, the loan amount (principal) is only $120,000! my question is is this normal that after 5 years the bank has calculated i will owe $155,000?? i understand how they calculated it – they added the present value of all future interest payments (30 years) to the amount i will owe. however, is this standard meaning most banks do it this way or is it completely wrong to the extent i should not take their loan? what happens after 5 years if i want to continue with a different bank?? lastly, in another section in the contract they mentioned" the mortgage is not renewable (after 5 years) on the same terms as described above (referring to interest and amortization). therefore, on one hand if i take their mortgage it will never make sense to switch to a different bank after the 5 years term due to a huge penalty - will owe $155k where initial loan is only $120k. on the other hand if i stay with them they can now (after 5 years) charge any interest they want as they mentioned above. i guess the bottom line is if this is a common/standard practice and most banks do it this way i will take the mortgage however if this is completely wrong/unreasonable i will not. is it even legal for a bank to charge future interest (25 years interest) at the end of a term (5 years)? don't they have to follow certain rules/regulations too? i would appreciate any advice on the topic. thanks & regards, neil ps. it's a variable rate mortgage and the monthly payments include interest and principal

Its called a balloon. Its a common practice. If you have good credit and intend to make your payments, there is no worry. After 5 years the bank will gladly make you another loan or continue with your present one assuming you have remained current. Why is the total amount due in 5 years? Its for the banks protection. With todays uncertain financial picture, the bank does not want to be tied to your present interest rate any longer than 5 years. There is nothing shady about the deal, I've had over 100 loans with 3-5 year balloons. Of course the deal cuts both ways. Interest rates could be higher or lower in 5 years. So you might be better off or worse off. If you feel that rates will be higher, or if you can get a better deal somewhere else on a 30 year loan with no balloon, then by all means go somewhere else. But if the terms and costs are otherwise favorable, I wouldn't worry about the balloon part.

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Got these wrong little help please 18.)molly ellen, bookkeeper for keystone company, forgot to send in the payroll taxes due on april 10. she sent the payment november 18. the irs sent her a penalty charge of 8% simple interest on the unpaid taxes of $4,700. calculate the penalty. (remember that the government uses exact interest.) 17.) joy kirby made a $288 loan to robinson landscaping at 11%. robinson paid back the loan with interest of $5.72. how long in days was the loan outstanding (assume 360 days) 16.) lane french had a bad credit rating and went to a local cash center. he took out a $117 loan payable in three weeks at $138. what is the percent of interest paid on this loan? do not round denominator before dividing. 14.)on april 8, 2010, janeen camoct took out an 7.2% loan for $21,500. the loan is due march 15, 2011. use ordinary interest to calculate the interest. what total amount will janeen pay on march 15, 2011? 13.) gordon rosel went to his bank to find out how long it will take for $3,100 to amount to $3,740 at 8.4% simple interest. please solve gordon’s problem years??? 12.)may. 15, 2010, leven corp. negotiated a short-term loan of $703,000. the loan is due oct. 13, 2010, and carries a 7.04% interest rate. use ordinary interest to calculate the interest. what is the total amount leven would pay on the maturity date? 11.) leslie hart borrowed $17,000 to pay for her child’s education at riverside community college. leslie must repay the loan at the end of 12 months in one payment with interest. interest? maturity? 10.) the main concept to investing is diversify your investments. the old saying of “don’t put all of your eggs in one basket” exemplifies this concept. kerry stutsman has saved $700 and is wondering how to invest it. she was researching different investment options and found a june 2009 article called “what you need to know about cd’s” in kiplinger’s personal finance magazine. she currently is investing in real estate through her home as well as contributing to the 401k she has at work and is thinking about investing in cd’s as well. she has the $700 in a savings account earning 0.65% interest. she is considering buying a 1-year certificate of deposit (cd) that pays 3.27% interest. what will be the annual difference in her interest earnings between the savings account and the cd? (round your answers to 2 decimal places. omit the "$" sign in your response.) savings account interest earned cd interest earned difference in interest earnings

18 4,700 x 0.08 = $376 17 288 x 0.11 x (x/360) = 5.72 x = 65 Days 16. 21 / 117 = 17.95% paid for three weeks 117 x (x) x 3/52 = 21 x = 311.11% Annual percentage rate 14. 21,500 x 0.072 x 37/360 = 159.10 Interest 21,500 + 159.10 = 21,659.10 Total amount due 13. 3,100 x 0.084 x (x) = 640 x = 2.46 years 12. 703,000 x 0.0704 x 29/360 = 3,986.79 Interest due 703,000 + 3,986.79 = 706,986.79 Total amount due 11.) Need more information to solve this problem. 10.) Savings account interest earned = 700 x 0.0065 = 4.55 CD interest earned = 700 x 0.0327 = 22.89 Difference in interest earnings = 22.89 - 4.55 = 18.34

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I mistakenly made two contributions to both a traditional ira and roth ira that put me over the $5000 limit. i know i will pay a penalty and i need to w/d the execess amount plus any earned money on the execess. who calculates the earned money, me (most likely) or the bank and does it have to be exact? it has been in a mm fund so it will only be a few dollars at most.

http://www.irs.gov/publications/p590/ch01.html#en_US_publink1000230873 Tax on Excess Contributions In general, if the excess contributions for a year are not withdrawn by the date your return for the year is due (including extensions), you are subject to a 6% tax. You must pay the 6% tax each year on excess amounts that remain in your traditional IRA at the end of your tax year. The tax cannot be more than 6% of the combined value of all your IRAs as of the end of your tax year. The additional tax is figured on Form 5329. For information on filing Form 5329, see Reporting Additional Taxes , later.