Examples
If you lend out 500k BYD Co. Ltd.(1211.hk) at 5% annual interest (360days) annually on 31/1/2012 (value date) and the borrower returned to you on 7/2/2012(value date), the calculation is as follows:
BYD Co. Ltd. (1211.hk)
Date | Closing price | Interest for single date |
31/01/2012 |
$24.25 |
$24.25 x 500,000 x 5% / 360 = $1684.03 |
01/02/2012 |
$23.65 |
$23.65 x 500,000 x 5% / 360 = $1642.36 |
02/02/2012 |
$24.55 |
$24.55 x 500,000 x 5% / 360 = $1704.86 |
03/02/2012 |
$24.65 |
$24.65 x 500,000 x 5% / 360 = $1711.81 |
04/02/2012 |
$24.65 |
$24.65 x 500,000 x 5% / 360 = $1711.81 |
05/02/2012 |
$24.65 |
$24.65 x 500,000 x 5% / 360 = $1711.81 |
06/02/2012 |
$24.90 |
$24.90 x 500,000 x 5% / 360 = $1729.17 |
The interest will be paid at the beginning of each month and / or on the value date of the return. In this case, you will receive $1684.03 at the beginning of February, and $10211.8 and 500k shares 1211.hk on 7/2/2012.