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Is it better to have your interest compounded annually quarterly or daily?
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Which is the better investment 8.5 percent compounded monthly or 9.1 percent compounded annually?
Answer: 9.1% At 8.5% principal grows by (1+(.085/12))^12 = 1.0884 times in one year which is less than investing at 9.1%.
What is better for the consumer simple interest or compounded daily?
I'm thinking of bonds when answering this question. The more frequent the compounding the better it will be for the lender. The less frequent the compounding the better it will be for the borrower. Lets use this example: Interest = 10% Principle = $1000 Compounding A = Annually Compounding B = Quarterly Time period = 2 years A) At the end of the first year $100 in interest would have been made making the balance $1100. At the end of the second year $110 would be earned because of compounding and the balance would be $1210. B) At the end of the first year $103.81 in interest would have been earned with a ending balance of $1103.81. At the end of the second year the interest earned would be $114.59 and the ending balance would be $1218.40. What I showed here is that if you are the one receiving the interest you would prefer daily compounding. When you're paying out interest you would prefer simple interest.
In 2000 Patti had the choice to invest 100000 in the housing market for five years or invest in a CD paying 4 compounded annually. If the 2000 CPI is 172.2 and the 2005 CPI is 195.0 ...Better option?
It is not possible to answer the question based in the information given since the increase in CPI does not reflect the return on the housing market.
What is the difference between simple interest and compound interest is one better than the other why or why not?
With compound interest, after the first period you interest is calculated, not only on the original amount but also on the amount of interest from earlier periods. As to "better" or not, the answer depends on whether you are earning it on savings or paying it on borrowing!
When you are earning interest is it better to have high or low rates?
High rates.However, high interest rates are usually a consequence of high inflation rates and so what matters is not the interest rate but the real interest rate which is the nominal interest rate relative to the inflation rate.Thus a 3% interest rate when inflation is 1% is better that a 5% interest rate when inflation is 4%.
What interest rate would you need to double your money in 10 years compounded annually?
you would need an interest rate of 7.2 %. this would be a great slow return leaving you better off. with today's economy there is plenty of real estate to launch a wealthy careeer ahead.
Interest on maturity is better or monthly interest?
If you need a monthly income then obviously a monthly income is better. If the monthly interest is not withdrawn then it makes no difference because the annual interest rate is usually equal to the compounded monthly rate.
Which is the better investment 8.5 percent compounded monthly or 9.1 percent compounded annually?
Answer: 9.1% At 8.5% principal grows by (1+(.085/12))^12 = 1.0884 times in one year which is less than investing at 9.1%.
What is better for the consumer simple interest or compounded daily?
I'm thinking of bonds when answering this question. The more frequent the compounding the better it will be for the lender. The less frequent the compounding the better it will be for the borrower. Lets use this example: Interest = 10% Principle = $1000 Compounding A = Annually Compounding B = Quarterly Time period = 2 years A) At the end of the first year $100 in interest would have been made making the balance $1100. At the end of the second year $110 would be earned because of compounding and the balance would be $1210. B) At the end of the first year $103.81 in interest would have been earned with a ending balance of $1103.81. At the end of the second year the interest earned would be $114.59 and the ending balance would be $1218.40. What I showed here is that if you are the one receiving the interest you would prefer daily compounding. When you're paying out interest you would prefer simple interest.
When interested is compounded the total time period is subdivded into several interest periods 1 year 3 months or 1 month how does compound interest effect the future value of an investment?
If the three-month interest rate was a quarter of the 12 month interest rate, then you would earn more interest. By extension, the shorter the subdivisions of time, the better off the investor would be. But this calculation is based on dividing the annual interest by four for a three month period. That is how simple interest works, but not compound interest. No financial company is going to fall for that! Their 3-moth rate will be based, not on a quarter, but on the fourth root of the annual rate. Thus, if the annual rate is r% the quarterly rate will be 100*[(r/100 + 1)0.25 - 1] % The calculation looks more complicated than it is due to (a) the need to convert percentage into fractions (why 100 crops up), and (b) to include the original capital to start off and then to exclude it (why the +1 and -1 come in). So, if r = 4% annually, then the quarterly rate will not be 1% but 0.98534% (approx). If the exact figure were used, then the four quarters, compounded, would equal exactly 4%. But there are no bets on whether the deposit taker will round that fraction up or down!
Best CD Interest Rates?
CD interest rates are not extremely high at the present time, but you can still find better Certificate of Deposit (CD) interest rates at certain financial institutions than at other ones. The best CD interest rates are easily found online. All you need to do is search for the best CD interest rates on any of the major search engines, and you are sure to notice several websites that specialize in comparing CD interest rates. These websites make searching for the best rates an easier task because you can easily compare all of the CD interest rates on one convenient page. Read this guide on the best CD interest rates to learn valuable information about this type of investment.A slightly higher interest rate makes a big differenceAurora Bank is currently offering 1.200 percent interest. Ally Bank is currently offering 1.190 percent interest and Bank of Internet USA is currently offering 1.330 percent interest. (See http://www.bankrate.com/cd.aspx.) All of these banks compound interest daily, which makes a big difference in the total, year-end yield of your CD account. A rate of 1.330 percent may not seem like much more than 1.190 percent, but the extra 0.140 percent does add up to greater savings, especially when you consider the fact that the interest is compounded on a daily basis.Choose a CD account in which interest is compounded daily because daily compounding of interest means additional money in your pocket. When interest is compounded monthly or quarterly, the yield is not as great as when it is compounded daily. An interest rate hike of 0.140 percent might not seem like much, but even a small percentage amount can add up to larger savings at the end of the year. Do not open a CD account that offers monthly or quarterly interest. When an interest-bearing savings account, checking account or CD account is compounded daily, you do notice a dramatic difference.
Jon deposits 1000 in an account that pays 8 percent interest compounded annually How long will it take to double your money?
1). My money will never double. Let's talk about Jon's money instead. 2). It doesn't matter how much he deposits into the account. The time required for it to double is the same in any case. 3). At 8% interest compounded annually, the money is very very very nearly ... but not quite ... doubled at the end of 9 years. At the end of the 9th year, the original 1,000 has grown to 1,999.0046. If the same rate of growth were operating continuously, then technically, it would take another 2days 8hours 38minutes to hit 2,000. But it's not growing continuously; interest is only being paid once a year. So if Jon insists on waiting for literally double or better, then he has to wait until the end of the 10th year, and he'll collect 2,158.92 .
Why is compound interest better than simple interest?
Compound interest is better than simple (or "nominal") interest because compound interest allows you to add your accumulated interest back to your total every given term (i.e. each day, each week, each month, quarterly, annually, etc.), thus increasing the amount of money you are earning interest on.Example:Say you deposit 100 dollars for 2 years at 10% per year in 2 banks, one which does not compound your interest (Bank A), and one that compounds annually (Bank B).Bank A:After 1 year: 100 x 1.10 (1.10 = your amount + 10%) = 110After 2 years: 100 x 1.20 (1.20 = your amount +10% x 2) = 120Bank B:After 1 year: 100 x 1.10 = 110but then instead of using 100 again, you add the additional 10 back into your total and collect interest on 110 dollars in year two.So:After 2 years: 110 x 1.10 (1.10 = your amount + 10%) = 121
How much interest can one earn on 5000 held for one year in a savings account?
Depends on the interest rate and how often it is compounded. Ex. 1.00% interest compounded monthly In one year, you would have $5,050.23 Ex. 1.00% interest compounded quarterly In one year, you would have $5,050.19 This is called Future Value and is calculated by using the following formula: Future Value = Present Value * (1 + rate)^time Keep in mind, the compounding makes a difference, you can find out how your bank compounds by calling them or checking their website. If its monthly, divide the rate by 12 (12 months). If its quarterly, divide the rate by 4 (4 quarters). Time should be the number of years multiplied by the same amount the rate is. In your case, time is 1 year * [12 months / 4 quarters / etc]. Also, keep in mind, the rate (percent) should be listed in decimal form, so 1% = 0.01 So in the case of 1% monthly, Future Value = $5,000 * (1 + 0.01/12)^1*12 = $5,000 * (1 + 0.0008)^12 = $5,000 * 1.01 = $5,050.23 May sound a bit complicated, so for a simple case like yours, you're better off using an on-line calculator. Just search for Future Value or FV caculator.
What is better a higher or a lower percentage?
If you are receiving interest on an assett, a higher interest is better. If you are paying interest on a debit, a lower interest is better.
In 2000 Patti had the choice to invest 100000 in the housing market for five years or invest in a CD paying 4 compounded annually. If the 2000 CPI is 172.2 and the 2005 CPI is 195.0 ...Better option?
It is not possible to answer the question based in the information given since the increase in CPI does not reflect the return on the housing market.
What kind of company is Congressional Quarterly?
Congressional Quarterly, better known as CQ, is a publication that reports primarily on the United States Congress. Due to high demand, CQ actually was published daily after the first year.
