04 April 2006

The New Math, Part Two?

So, I'd say I'm fairly intelligent when it comes to math (even by Earth standards), but I have a feeling my powers are going to be for naught, because obviously math as Earth knows it has changed.

A friend recently re-financed his home (on a daily interest system) and set it up on automatic biweekly payments. Well, as happens whenever money is involved, someone screwed up.

So, get your pencils, your paper, and your calculators ready, because this will be a toughie...

One payment was made 14 days after the last.

Another payment was made 14 days after that one.

So, one would think that the principal/interest split on the second payment (amounts don't matter) would have ended up more for principal, less for interest, right?

(For those still back at "Where's my calculator?!?" your balance would be lower on the second payment, and thus the interest would be less, at least it used to be)

But yet, the interest was not just more, but so much more that it cut the principal payment to a quarter of what it should have been.

Repeated attempts have been made to convince the bank in question that they're mistaken (even though they've attempted to justify the interest unsuccessfully on multiple occassions), but yet nothing has come of it.

I guess the next step for my friend is to contact federal authorities, as I imagine financial fraud is still a crime...

Unless, of course, the math rules have really changed...

Aston West
bank interest
home loans