Post by gnasher on Oct 21, 2014 5:56:23 GMT
Splitting this out of the queue thread as it is developing into another subject, but that is where it started. i.e. with confusion about RS working to either 1 or 2 decimal places, and the rate in the contract being different from the lender rate because it takes account of compounding
I have been through my contracts which I have for various rates between 6.5
and 5.2 
. At any lender rate the contract rate is the same (normally!), I then back calculated the lender rate using the suggested formula for the assumed compounding from reinvestment. This is what I found:
Lender Contract Calc
6.5 6.32 6.5
6.4 6.22 6.4
6.3 6.13 6.3
6.2 6.04 6.2
6.1 5.94 6.1
6.0 5.85 6.0
5.9 5.75 5.9
5.8 5.66 5.8
5.7 6.18 6.4
5.6 6.07 6.2
5.5 5.97 6.1
5.4 5.86 6.0
5.3 5.76 5.9
5.2 5.65 5.8
i.e. at rates of 5.8 and above, it all fits. i.e. RS quote a lender rate that assumes we reinvest so it is compuunded.
But at 5.7 and below something else is happening, i.e. the Contract rate is higher than the lender rate. So my 5.6 orders have about the same contract rate as my 6.2 ones. e.g :
I have a 5.6% order for £161 paying £3.21 a month.
I have a 6.2% order for £233 paying £4.50 a month.
Both of these work out at about £1.93 a month per £100 lent, if my very shoddy maths/excel skills are correct.
Can someone explain?
I have not checked all of my contracts, but I have checked them all at 5.7 where the anomoly starts. They all have a contract rate of 6.18.
At some point in the past did RS change the way that they quoted or calculated the rates?
I have been through my contracts which I have for various rates between 6.5
and 5.2 
. At any lender rate the contract rate is the same (normally!), I then back calculated the lender rate using the suggested formula for the assumed compounding from reinvestment. This is what I found:Lender Contract Calc
6.5 6.32 6.5
6.4 6.22 6.4
6.3 6.13 6.3
6.2 6.04 6.2
6.1 5.94 6.1
6.0 5.85 6.0
5.9 5.75 5.9
5.8 5.66 5.8
5.7 6.18 6.4
5.6 6.07 6.2
5.5 5.97 6.1
5.4 5.86 6.0
5.3 5.76 5.9
5.2 5.65 5.8
i.e. at rates of 5.8 and above, it all fits. i.e. RS quote a lender rate that assumes we reinvest so it is compuunded.
But at 5.7 and below something else is happening, i.e. the Contract rate is higher than the lender rate. So my 5.6 orders have about the same contract rate as my 6.2 ones. e.g :
I have a 5.6% order for £161 paying £3.21 a month.
I have a 6.2% order for £233 paying £4.50 a month.
Both of these work out at about £1.93 a month per £100 lent, if my very shoddy maths/excel skills are correct.
Can someone explain?
I have not checked all of my contracts, but I have checked them all at 5.7 where the anomoly starts. They all have a contract rate of 6.18.
At some point in the past did RS change the way that they quoted or calculated the rates?
