Rate confusion

registerme
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Rate confusion Jul 11, 2015 8:46:35 GMT

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Post by registerme on Jul 11, 2015 8:46:35 GMT

I'm scratching my head about something, so was hoping that one of you has already figured out how this is meant to work

. I have a loan part. I bought it on the secondary market (not sure if this is relevant).

a) The average rate is 9.7%.
b) The part I bought came with a rate of 9%.
c) I have put it up for sale at 0% premium, it says the buyer rate is 8.9%.
d) The loan part report says that the rate is 9.8%.
e) The income report says that the rate is 9%.

I don't understand the discrepancy between a) and d), assuming that is that these are actually meant to be the same number.
I don't understand the discrepancy between b) and c), with a 0% premium why would the prospective buyer rate change?

Can anybody shed any light on this?

Cheers,

RM

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GSV3MIaC
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Rate confusion Jul 11, 2015 9:46:19 GMT registerme likes this

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Post by GSV3MIaC on Jul 11, 2015 9:46:19 GMT

1) a and d are not the same number. a) is (I assume you meant) the average for the loan, read it off the loan details page. d) is what YOUR part is yielding, but that's allowing for the discount I assume you bought it at. If it's really a 9% part (which some clown bought at auction, when there were 10% parts available, and the average was 9.8%) then they'd have had to sell it at a discount to make it look even halfway attractive.

2) b & c probably differ because of rounding. An 8% fixed rate part often shows as 7.9%, because FCs computer calculates it with horrid accuracy (taking account of 28 day months, and when you paid for the interest vs when it'll be coming back to you, etc etc) and then TRUNCATES the answer to 1 decimal place (presumably so that you are never told it is an 8% part when it's really only 7.9779%)

Last Edit: Jul 11, 2015 9:46:54 GMT by GSV3MIaC

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SteveT
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Rate confusion Jul 11, 2015 9:48:45 GMT registerme likes this

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Post by SteveT on Jul 11, 2015 9:48:45 GMT

There regularly are rounding differences between the rate shown when listing parts for sale on the SM and that displayed when buying via "Loan parts". To hit a displayed rate of (say) 11% I usually set my premium at the highest % that shows 10.9% on the "Sell Individually" page. It's one of the many idiosyncrasies of the Failed Calculus system.

[GSV3MIaC got there faster and rather more clearly than I did]

Last Edit: Jul 11, 2015 9:50:41 GMT by SteveT

registerme Member of DD Central Posts: 6,233 Likes: 6,038	Rate confusion Jul 11, 2015 10:06:29 GMT Quote Select Post Deselect Post Link to Post Back to Top Post by registerme on Jul 11, 2015 10:06:29 GMT Thank you both very much. There's a lot they could do to make this clearer isn't there.
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Post by registerme on Jul 11, 2015 8:46:35 GMT

Post by GSV3MIaC on Jul 11, 2015 9:46:19 GMT

Post by SteveT on Jul 11, 2015 9:48:45 GMT

Post by registerme on Jul 11, 2015 10:06:29 GMT