Calculate Interest on Account: 2.1% per Annum

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SUMMARY

The discussion focuses on calculating interest for an account with an annual interest rate of 2.1%. The most accurate method involves calculating daily interest based on the daily balance, which is derived from dividing the annual rate by 365, resulting in a daily rate of 0.00575%. Alternatively, users can compute the average balance over the year and multiply it by 0.021 to estimate the total interest accrued. For example, an average balance of $1,200 yields $25.20 in interest.

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lave48
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I have an account that pays 2.1% per annum. The amount in the account has varied over the year due to withdrawals. My question is what is the formula for working out the interest due to me over the year? Many thanks in advance Lave48
 
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Precisely what happens depends upon the policy of the bank. Most likely, and certainly the most exact, would be to deal with individual days. An interest rate of 2.1% per year is 2.1/365= 0.00575% per day. Calculate the interest for each day with the amount of money that day.
 
lave48 said:
I have an account that pays 2.1% per annum. The amount in the account has varied over the year due to withdrawals. My question is what is the formula for working out the interest due to me over the year? Many thanks in advance Lave48
...or calculate the average balance for the year;
multiply result by .021

Example: if av.bal. = 1200, then 1200*.021 = 25.20
Enough for a 12pack of beer!
 

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