Check my math/info with a 4.5% APY.
If i deposit $5000, at the end of the month I will have $5225? I multiplied $5000 by .045 to get the interest then added the $5000 back to get $5225 total.
and at the end of the second month (without adding any additional money) I will have $5460? I multiplied $5225 by .045 to get the interest, because I get the interest on all of it not just the original $5000 right? then added the $5225 back to get $5460 total.
2007-03-03 16:04:32 · 4 answers · asked by Becky 1 in Business & Finance ➔ Personal Finance
Your MONTHLY interest is .045/12 = .00375...since the 4.5 is ANNUAL percentage yield.
After the first month, you would get $18.75 ($5,000 * .00375)
After the second month, you would get $18.82 ($5,018.75 * .00375)
And so on.
2007-03-03 16:28:17 · answer #1 · answered by Brad L 4 · 0⤊ 0⤋
That APY stands for Annual Percentage Yield. You don't get $225, you earn $18.75 for the first month. Each month after that would increase slightly because of the monthly interest earned added to the principal. You'd earn $225 for the entire year. Ask at the bank to have it explained fully.
2007-03-04 00:14:59 · answer #2 · answered by NJGuy 5 · 0⤊ 0⤋
Interest works like this....
$5,000 x 4.5 % = $225 for the entire year
To find out how much you get each month you divide the total by 12
225 / 12 = 18.75
You will get $18.75 per month
2007-03-04 00:33:50 · answer #3 · answered by Geeeyaaa 4 · 0⤊ 0⤋
As they said above but
www.emigrantdirect.com
is better at 5.05% and a little easier to get started and use.
2007-03-05 01:22:56 · answer #4 · answered by hogie0101 4 · 0⤊ 0⤋