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Ok I opened an online savings account today. My hubby and I are disagreeing on the return from the interest rate. Let's say I put $1000 into a savings account with an APR of 2.5%. How much a MONTH will I see in interest earned?

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Anonymous

Asked by Anonymous at 11:29 PM on Oct. 15, 2008 in Money & Work

Answers (10)
  • I recently opened a online savings account where the APR is 3.? % and I deposited $1500. After a month, I only earned $2.50 in interest.
    goinginsane1

    Answer by goinginsane1 at 11:32 PM on Oct. 15, 2008

  • for the first month, your interest payment will be aprox. 2.05

    average daily balance X APR / 365 X days in the cycle (30 or 31 depending on the month)

    so 1000 X 0.025 = 25, 25/365= 0.06849, 0.06849X30= $2.05

    each month this will very slightly go up since the second month your daily balance would be 1002.05. If you make deposits this will go up too.
    flutterfae

    Answer by flutterfae at 11:34 PM on Oct. 15, 2008

  • goinginsane- check your interest rate. that 2.50 payment on $1500 is a 2.0 interest rate which is about average on a regular savings account.
    flutterfae

    Answer by flutterfae at 11:36 PM on Oct. 15, 2008

  • I am not a mathematician, but I was simply posting an estimate to give this poster an idea of what to expect. (Rough estimate). It's too late at night for me to sit down and figure it all out! LOL
    goinginsane1

    Answer by goinginsane1 at 11:39 PM on Oct. 15, 2008

  • ok :) goinginsane
    flutterfae

    Answer by flutterfae at 11:43 PM on Oct. 15, 2008

  • approx. $2.08 in the first month... you can pretty much take the dollar amount x the 2.5% then divide by 12. (Twelve months in a year) Remember APR is Annual Percentage Rate, not monthly... Hope this helps some. Good Luck with the hubby.... Hugs!
    SweetsWAHM

    Answer by SweetsWAHM at 1:13 AM on Oct. 16, 2008

  • How will the interest be compounded? Daily? Monthly? Also, the amount will vary month to month since you'll be earning interest monthly and possibly depositing additional funds.

    Anonymous

    Answer by Anonymous at 7:43 AM on Oct. 16, 2008

  • The first year you will earn $25 in interest and 29 cents in compound interest.
    The next year you will have made a total of $50 in interest and a total of $1.22 in compound interest.
    In 5 years you will have $125 in interest and $33 in compound interest.
    In 10 years it will be $200 in interest and $83.69 in compound interest.
    Finally- in 20 years you'll have $500 in interest with an additional $147.86 in compound interest.

    You can find better interest rates out there if you go to a credit union and put your money into a CD. Plus, it will really help if you continue adding money to your savings account. Even $10 a month helps.
    EricaAbbott

    Answer by EricaAbbott at 12:24 AM on Oct. 18, 2008

  • Oh woops- every month you'll see $2.08 in interest.
    EricaAbbott

    Answer by EricaAbbott at 12:25 AM on Oct. 18, 2008

  • My husband came home talking about opening an on-line savings account 2.5%. I thought he was nuts. I took half of the money and invested in a little side business (it' s legal and moral lol)
    and made a 50% return the next week. I do not play with my money!
    RidingPink

    Answer by RidingPink at 11:33 PM on Oct. 21, 2008

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