Posted: 11/1/2007 11:40:59 AM EDT
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I put in a $1000 at 3.4% for 6 months. Interest is compounded daily and it is added to my CD at the end of every month. How can I estimate how much I will earn in interest? I tried to calculate it already but I ended up with $1020 of interest after 30 days. I know that isnt right. Help please. 
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think of it this way: in 1 year you would make 1034 without the daily compounding. So in 6 months, you will have $1017 total. The daily compounding is just saying you will gain interest on the interest money you eared. So day one you make something like .009 cents. then you have 1000.009 and you earn .010 cents the second day. it keeps multiplying. you will end up with something around $1022 after 6 months. I did this in my head so don't get grumpy when i am off by a couple bucks (I accidently deleted my calc function from my computer and don't know how to get it back!) you might look at just using the money to invest in a deal you find on the net and turn around and sell it again for a profit. you could easily make more money that way. |
You are barely holding up with inflation. While you may appear to have more money, it will only purchase the same amount of goods. |