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how do banks calculate daily compound interest. How do you calculate monthly interest earned on a savings account. A P1rn nt.
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Length of Term in days Daily Reinvest Rate. To arrive at the actual amount of interest you would need to accrue for a single day you would divide the original interest rate by 360 or 365. To calculate monthly compounding over multiple years youd use 12 periods per year.
The monthly payment on a five-year loan for 30287 at 6 interest would be 58553.
Initial Purchase Amount. Calculations are based on 365 days per year even though leap years have an additional day. Throw in the 10 down payment and the car costs 38497. Using the theory of compound interest he earns interest each month on the amount of principal and interest the bank pays him for his money on deposit in other words the accumulated balance.
