Yesterday I spent quite some time searching for the best online savings bank with a high interest yield. I was finally able to find the one that suits my financial goals and I opened an account right away. The processing didn't take more than ten minutes. I'm going to get 2.00% APY and the interest is compounded daily. The more frequently interest is compounded, the higher the APY.
So this is how we're going to calculate the daily interest on a savings account with 2.00% APY:
.02/365 (always change percent to decimal and 365 represents the days since interest is compounded daily)
= 0.000054795 (the answer which then you multiply to whatever amount you have in your savings account. For an example, let's say you have $4,000)
0.000054795 . 4,0000 = 0.219178082 (this is your daily interest)
If you want to know how much interest you'll get in a month, you simply multiply 0.219178082 by 31 so the answer is 6.79. So for your $4,000 with compounded daily interest you get $6.79. Now this amount will change because your next month's interest will be based on $4,006.79.
Hope this helps.
1 comments:
Yes, this was very helpful much easier to understand in terms.
thanks
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