Question about interest, please help (pay, rates, dollars, range)

[angelo129]

I'm about to display my ignorance about money matters, and hope someone here will give me the benefit of their money savvy.

Three years ago, a relative lent me $4000.00. I've paid back all but a few hundred dollars and will be sending her the last check in August. She has said she doesn't want anything except the amount I borrowed, but I don't feel right about not giving her any interest since, if she had that money in CDs (which I think is what she usually does with her money) she would have made something. I don't want her to lose out on anything by having lent me this money, and it's my intention to add an amount to the last check that is about what she would have received in interest on this amount if she'd had it in a CD for three years. I have no idea what that amount would be, and if I'm going to err, I want to make sure it's on the generous side. Can anyone give me an idea (or a range) of what could be expected in interest (typically) on that amount for the time in question? My aunt doesn't play the stock market or invest her money in risky ways, and I just want to make sure I treat her with the generosity she deserves.

[katestar]

Here is a calculator you can use:

http://www.thecalculatorsite.com/fin...calculator.php

CD's these days give what like 1%. If you plug 1%, you get about $120 in interest over 3 years compounded monthly. I would maybe just give her $500 extra? If that's too much, maybe $300, depends on your means at this point. Interest rates have been so low that unless you were to invest in the market, you are getting pennies.

[katestar]

By the way, good job on paying it back, I don't lend money, relative or not!

Also, maybe you could just buy her something nice or something she needs. For example, maybe she's wanted to replace her flat screen TV for a while - I was looking at some nice ones online in the range of 40 inches for under $400. Just an idea.

[angelo129]

Thanks for giving me a range, which is what I really wanted. In my family, we don't lend money either - it just kind of circulates around to where it's needed. I'm just glad to be in a position to give back, and then some.

[snowdenscold]

Considering where interest rates have been the past 3 years, I think between $100 and $200 extra is fair.

[Pilgrim21784]

Aside from whatever interest you decide to pay - definitely suggest you send her a VERY nice bouquet of flowers, possibly with some Godiva chocolates as well.

[angelo129]

Thanks to all who replied with suggestions, all of which were good ones (except the Godiva - she's diabetic!). But I'll make sure my kind relative has no regrets about helping me out, and thanks again for your help.

[MrRational]

Originally Posted by angelo129

She has said she doesn't want anything except the amount I borrowed...

Then step one is to finish that in full.

...I just want to make sure I treat her with the generosity she deserves.

That doesn't have to be in cash.
If anything... cash is the LAST thing she wants to see.

Look around for something that she needs done that you can do PERSONALLY which she can't.
Do that thing. Then look for another thing to do.

[justanokie]

I would say $200 and a nice gift...a useful gift.