Download Free Compound Interest Calculator free. Free Compound Interest Calculator. Compounding and Your Return Calculator How interest is calculated can greatly affect your savings. The more often interest is compounded, or added to your account, the more you earn. This calculator demonstrates how compounding can affect your savings,.
Free Compound Interest Calculator 1.0 Free Download Page. Free Compound. If you experience problems downloading Free Compound Interest Calculator 1.0. / Organize Desktop Enhancements Developer Tools Drivers Essential Software Games Graphics / Design Home / Education Internet Mobile / Smartphone Tools Network Programming. Download a Compound Interest Calculator for Excel or use the online calculator for compound interest problems related to savings or loans.
Compound Interest Calculator Download For Mobile HomeHow Compound Interest is Calculated
Interest 'compounds' each time you earn interest on your money and that interest is added to your account. For example, if you have $100 in the bank and earn 5% interest compounded yearly, then after one year, your bank will deposit an extra $5 in your account. You now have $105. After the end of the next year, you will have $105*1.05 = $110.25, having earned 5% of $105, or $5.25. Naturally, if the interest rates are equal, you'd prefer an account that compounds more frequently. When you take into account the compounding, you get what's referred to as the 'APY', or 'Annual Percentage Yield'. An account that compounds yearly will have an APY equal to its interest rate, but one that compounds more frequently will have a higher APY.
The most basic way to calculate compound interest would be to simply do it by hand. If you have an initial amount:
Balance = $100and add 5%, you get: Balance = $100 + (100 * 0.05)Generalizing that, applying the interest is simply Balance = Balance * (1 + interest_rate)
Of course, the interest rate is expressed yearly, so if we want to apply it more frequently -- say, daily -- we have to divide it by the fraction of the year that has passed. The daily interest rate is just 1/365 of the yearly interestrate. So each day, we would do Balance = Balance * (1 + interest_rate / 365).
But doing that 365 times would be tedious. To simplify that, we note that we're just doing thatmultiplication 365 times per year. Which we could express as (1 + interest_rate / 365) raised to the power of 365.So one year of daily compound interest is thus:
Balance = Balance * (1 + interest_rate / 365)365.And that's it for basic compounding. Thus, a 5% interest rate, compounded daily, would result in a(1 + 0.05/365)365 = 5.127% Compound Interest CalculatorCalculator For Compound Interest DailyAPY.Comments are closed.
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