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Mothly Interest or Annual interest
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How does annual interest on a saving account compare with monthly interest
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For more on marking an answer as the "Best Answer", please visit our FAQ.I'm not even sure that this is what you're asking but over the course of the year, both amount to the same figure.
If the annual rate was 12% then �100 would grow to be �112.
If this was quoted as a monthly rate, it's not as simple as just dividing it by 12 as the interest would be compounded.
The *wrong* calculation (i.e. that monthly is 1%) is that after one month, �100 becomes �101. After 2, �102.01 (instead of just �102).
Loosehead's formula is probably right although I've not checked it out.
If the annual rate was 12% then �100 would grow to be �112.
If this was quoted as a monthly rate, it's not as simple as just dividing it by 12 as the interest would be compounded.
The *wrong* calculation (i.e. that monthly is 1%) is that after one month, �100 becomes �101. After 2, �102.01 (instead of just �102).
Loosehead's formula is probably right although I've not checked it out.
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