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The BMW Range
5 Series
F10, F11, F07
F10 Demographic
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<blockquote data-quote="EL118" data-source="post: 542049" data-attributes="member: 22940"><p>Agreed. the Hire purchase interest if flat rate, not effective. normally the rule of thumb is the effective rate = 2 x flat rate. in this case, flat rate of 2.5% = close to 5% effective rate.</p><p></p><p>That means if you place in FD 3% and take HP at 2.5%, ur interest income can never cover your interest expenses. the difference is actuall the bank's gross margin profit. i.e. they collect deposits at FD or lower rate and lend out at HP or term loan rate to make profit.</p></blockquote><p></p>
[QUOTE="EL118, post: 542049, member: 22940"] Agreed. the Hire purchase interest if flat rate, not effective. normally the rule of thumb is the effective rate = 2 x flat rate. in this case, flat rate of 2.5% = close to 5% effective rate. That means if you place in FD 3% and take HP at 2.5%, ur interest income can never cover your interest expenses. the difference is actuall the bank's gross margin profit. i.e. they collect deposits at FD or lower rate and lend out at HP or term loan rate to make profit. [/QUOTE]
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F10 Demographic
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