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January 12th, 2007 at 10:31 am

Can someone show me mathmatically what I would earn on $800.00 at 4.5% compounded annually. I know ING is supposed to pay interest monthly but I have never learned quite how to do it. It's not that I can't multiply but am not sure of my results. Thanks a bunch....SmileSmileSmileSmile

10 Responses to “?”

  1. monkeymama Says:

    Compounded annually would just be
    $800 x 1.045, or $836. Monthly might earn you another couple of dollars - I bet you can finad an online calculator tool. But I guess us blog readers will do, eh? LOL.

  2. scfr Says:

    Here's a calculator:
    http://www.bankrate.com/brm/cgi-bin/savings.asp

    It doesn't show you what you should be getting each month, but it will show you how the amount will grow over time and how much you should have after the end of one year, two years, etc.

  3. Lau Says:

    4.5% is the APR, which means that if you deposit $800 , you'll have what monkeymama says after 12 months: 800 * 1.045 = 836. Which means that you'll get around $2.94 in interest the first month, and a little more (a few cents more) every month after that.

  4. marymara Says:

    Thank you all so much. I hope you will think that there is no such thing as a silly question. I will probably have a LOT more questions as time goes on. I really appreciate your help. SmileSmile

  5. marymara Says:

    LOL..........who needs a calculator when I have YOU? (smile)

  6. Broken Arrow Says:

    Monkeymama has shown you the correct one for compounding annually, and that's the easiest one to use... which is:

    Principal * ( 1 plus Interest Rate)

    To compound monthly, the formula starts to get ugly:

    Principal * ( 1 plus ( Interest Rate / 12 ) ) ^ 12

    Me? When I'm in front of a computer, I use Money Chimp! Big Grin

    (And no, there is no such thing as a silly question, especially when it comes to our money! Smile)

  7. Ima saver Says:

    Mary, just take $800 times .045 =$36. If you want to know daily, divide $36 by 365 days and you are earning .0986 cents a day. Almost 10 cents!

  8. scfr Says:

    And here's something exciting: If you leave the money and all of the interest there (and if the rate doesn't change) in 10 years the amount will be $1,242.38.

    And here's something REALLY exciting: If you add just $10 a month to the account, and leave all of the money and interest there (and if the rate doesn't change) in 10 years the amount will be a whopping $2,765.57!!!

  9. marymara Says:

    Wow!!! I have been using the moneychimp.com calculator as suggested by
    Broken Arrow. Great thingie!

  10. baselle Says:

    And think of it this way - for every 80$ you put in, you get a penny more in interest/day.

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