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| Math Central | Quandaries & Queries |
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Subject: Interest yield What would my rate of compound interest be per month? Thanks in advance, Dan |
Hi Dan.
The formula for compound interest is:
A(t) = P(1+r/m)tm
where A(t) is the amount you have after t years, P is the principal, r is the annual interest rate and m is the number of times per year it is compounded.
You want r.
You asked about "per month" compounding, so 150 days is about 5 months.
94300 = 80000(1 + r/12)5
94300/80000 = (1+r/12)5
(94300/80000)1/5 = 1 + r/12
12( (94300/80000)1/5 -1 ) = r
r = 0.4013
So your interest rate is about 40.13 % annualized.
Stephen La Rocque>
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