It is not going to be simple as A has used the boat more than B (maybe a 75/25% or 85/15% or 95/5% split). You will also need to consider what interest rate to apply – personal loan, bank mortgage, 2nd tier lender etc. You could refer to the last 5 years of bank statements to determine the actual interest rates applied to the loan.
That is not an easy question to answer. Maybe you could take a half way figure between the two extremes of mortgage interest ranges say 7% p/a or ask the loan provider if they can tell you what the interest rate and date was at each rate increase.
It really depends on when the payments were made for the boat repairs.
As an example
Say year one $1000 was spent then really this would be $500 due to half share in boat
FV=PV(1+.07)^5
future value = 500*(1.07)^5
future value = 500 * (1.402)
future value = $701
second payment
Say year two $1000 was spent so half share $500
FV=PV(1+.07)^4
future value = 500*(1.07)^4
future value = 500 * (1.31)
future value = $655
Third payment say year 3 $1000 was spent so half share $500
FV=PV(1+.07)^3
future value = 500*(1.07)^3
future value = 500 * (1.225)
future value = $612
Fourth payment say year 4 $1000 was spent so half share $500
FV=PV(1+.07)^2
future value = 500*(1.07)^2
future value = 500 * (1.14)
future value = $572
So total future value = 701 + 655 + 612 +572 = $2541 based on 7% p/a interest rate
Basic Finance formula for working out Future money value
N = number of years left to end of term on each expense incurred
int rate = annual interest rate percentage /100
PV = principle value of expense at time of expense incurred
Total FV = PV5(1+int Rate5)^N5 +PV4(1+int Rate4)^N4+PV3(1+int Rate3)^N3+PV2(1+int Rate2)^N2+PV1(1+int Rate1)^N1
If you can find out the interest rate charged you can average the interest rate over the number of years remaining
Say at 1st year int was 9% and next year it was 7% and year after it was 5% and year after that it was 4% as an example
two ways of working out
average interest rate so (9 + 7+ 5+ 4)/4
or place in an excel spread sheet so fv5 = pv5*(1+interest rate5) then take this figure and fv4 = (fv5+( pv4))*(1+interest rate4)
and then take fv4 and fv3 = (fv4+( pv3))*(1+interest rate3)
and then fv2 = (fv3+( pv2))*(1+interest rate2)
it would look like
or place in an excel spread sheet so fv5 =500*(1+.09) then take this figure and fv4 = (545+(500))*(1+.07)
and then take fv4 and fv3 = (1118.15+( 500))*(1+0.05)
and then fv2 = (1699+( 500))*(1+.04)
fv2 = 2287
fv2 also would be total future value as each component has been compounded into each other to get total future value.you can substitute the future values to make into the formula
fv5 = pv5*(1+interest rate5) then take this figure and fv4 = (fv5+( pv4))*(1+interest rate4)
and then take fv4 and fv3 = (fv4+( pv3))*(1+interest rate3)
and then fv2 = (fv3+( pv2))*(1+interest rate2)you can substitute the future values to make into the complex formula below
fv2 = ((fv4+(pv3))*(1+interest rate3)+( pv2))*(1+interest rate2)
fv2= (((fv5+( pv4))*(1+interest rate4)+(pv3))*(1+interest rate3)+( pv2))*(1+interest rate2)
fv2= (((pv5*(1+interest rate5) +( pv4))*(1+interest rate4)+(pv3))*(1+interest rate3)+( pv2))*(1+interest rate2)
total fv = fv2 * (1+ interest rate in last year)
total fv= ((((pv5*(1+interest rate5) +( pv4))*(1+interest rate4)+(pv3))*(1+interest rate3)+( pv2))*(1+interest rate2) )*(1+ interest rate in last year)The future value gives you a similar amount save if you had paid the money off the loan due to it taking into account the compounding effect had the money come off the home loan over the time periods.
Thank you sooooo much for this!
I will gather all the information and past payments and will try and work it out
Wow Duckster, next time I'm having trouble remembering how to apply all those finance formulas I learnt in Uni, I'm sending you a PM! That'll save me re reading the 800 page text book on my bookshelf (which i probably really should re read).
SIt all just sounds very complicated.
If A and B's father always intended the boat to belong to both of them, it would be far easier just to sell the boat, pay back A the $4000 he has spent on the boat and then split the rest between A & B. So what if A also had a mortgage and could have put the money towards his mortgage? The boat was a gift. A and B were always going to have to pay maintenance on the boat. The fact is that A has has far more use of the boat than B and has had greater benefit. The maintenance on the boat was probably due to A's wear and tear.
Nitpicking over every last dollar is only going to lead to a family rift. If A genuinely doesn't want to be greedy then just take the four grand off and split the rest.
Cheers
K
No, the father always intended the boat to belong to A which is why he put it into A's name. A does not expect B to pay $4000 as this is the total cost of the bills etc. The maintenance is not due to wear and tear, it is for regular servicing, which needs to be performed whether the boat is used or not. A is doing B a favour by giving her ANY money as it is in A's name afterall.
Linar wrote:It all just sounds very complicated.
If A and B's father always intended the boat to belong to both of them, it would be far easier just to sell the boat, pay back A the $4000 he has spent on the boat and then split the rest between A & B. So what if A also had a mortgage and could have put the money towards his mortgage? The boat was a gift. A and B were always going to have to pay maintenance on the boat. The fact is that A has has far more use of the boat than B and has had greater benefit. The maintenance on the boat was probably due to A's wear and tear.
Nitpicking over every last dollar is only going to lead to a family rift. If A genuinely doesn't want to be greedy then just take the four grand off and split the rest.
Cheers
K
not_so_lucky wrote:A is doing B a favour by giving her ANY money as it is in A's name afterall.
I don't know, it sounds like the boat was a gift from their father to both of them. If this is the case, then A should be giving B money, it is not a favour, the boat is partly owned by B. So what if the boat is in A's name only, that is merely paperwork. It would be interesting to see what equitable law precedent there is on actual ownership v registration or a vehicle. It sounds to me like A DOES want to be greedy, afterall. I agree with Linar, nitpicking over interest etc is likely to cause a family rift. Why not sell the boat, split the proceeds evenly and give A an extra $2K to cover B's half of maintenance.SHales wrote:not_so_lucky wrote:A is doing B a favour by giving her ANY money as it is in A's name afterall.
I don't know, it sounds like the boat was a gift from their father to both of them. If this is the case, then A should be giving B money, it is not a favour, the boat is partly owned by B. So what if the boat is in A's name only, that is merely paperwork. It would be interesting to see what equitable law precedent there is on actual ownership v registration or a vehicle. It sounds to me like A DOES want to be greedy, afterall. I agree with Linar, nitpicking over interest etc is likely to cause a family rift. Why not sell the boat, split the proceeds evenly and give A an extra $2K to cover B's half of maintenance.Thanks for your opinion but I am not after opinions. I was just asking for advice as to how to work out the interest etc.
[/quote]
Thanks for your opinion but I am not after opinions. I was just asking for advice as to how to work out the interest etc.
[/quote]Obviously "not_so_lucky" is "A" and is getting cranky at being called greedy.
Maybe, but it's correct, they didn't ask for our opinion, just advice on the mathematics.
That did occur to me before I posted my last, and I thought before I posted.
I decided that sometimes I lose sight of the whole picture getting so focussed on details like interest and legal liability, and sometimes it is helpful if someone else reminds me of a more wholistic perspective. Sorry if I offended, I didn't mean to, I only meant to offer a gentle reminder of the broader picture. Good luck resolving the dispute, and following those terrific equations you were given earlier.
SSHales wrote:Maybe, but it's correct, they didn't ask for our opinion, just advice on the mathematics.That did occur to me before I posted my last, and I thought before I posted.
I decided that sometimes I lose sight of the whole picture getting so focussed on details like interest and legal liability, and sometimes it is helpful if someone else reminds me of a more wholistic perspective. Sorry if I offended, I didn't mean to, I only meant to offer a gentle reminder of the broader picture. Good luck resolving the dispute, and following those terrific equations you were given earlier.
SThanks
Not offended at all actually. I didnt write the whole story and certainly don't intend to but I understand why you guys might see A as greedy. Doesn't bother me though as I know the history and all the details
You must be logged in to reply to this topic. If you don't have an account, you can register here.
