“You don’t. It’s whatever the computer says it is.”
This was the answer given by my banker when I asked them the very same question.
They just turned their monitor over to my side of the table and asked me to read whatever was displayed on the screen. They had no clue about the interest calculation formula.
This is not just for credit card interest. I’ve observed the same response w.r.t savings account interest, fixed deposit interest, TDS, and so on.
Now, this is not just some boondocks bank. It’s a Top 3 private sector bank in the nation and the inspiration for my following social media post:
The best talent is that which has both fundamental knowledge and skills in tools. That much is obvious. The really interesting question is regarding the second best. Back in the day, I’d have ranked knowledge without skills above skills without knowledge. But no longer. Nowadays, many Uber drivers know little to nothing about the topography of the city but still manage to complete rides using Google Maps navigation; many private sector bank employees don’t know how to calculate interest or TDS but have still managed to build extremely valuable companies based on core banking software and other skills. After coming across such people everyday, I’ll now rank skills without knowledge ahead of knowledge without skills.
Talking of formulas in financial products, I did come across the following formula in the T&Cs of a financial product I’d bought a few years ago:
Absolutely nobody at the financial services provider I could connect with was able to explain how this formula worked.
So much for formulas in finserv products.