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Following our earlier example, if your dividend rate at a credit union is 4.5% and interest is compounded monthly, your APY would be 4.59% for the same account.
For instance, if you deposit $10,000 into a savings account earning 2%, you’d generate $200 in interest over the course of a year. As long as the principal and interest rate remain the same, you ...
This is a reasonable approximation if the compounding is daily. Also, a nominal interest rate and its corresponding APY are very nearly equal when they are small. For example (fixing some large N), a nominal interest rate of 100% would have an APY of approximately 171%, whereas 5% corresponds to 5.12%, and 1% corresponds to 1.005%.
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When you estimate property taxes, insurance, and PMI, that brings your monthly mortgage payment on a 30-year fixed home loan to around $3,055 (assuming a 7% fixed interest rate). Based on the 28/ ...
For example, a five-year loan of $1,000 with simple interest of 5 percent per year would require $1,250 over the life of the loan ($1,000 principal and $250 in interest). You’d calculate the ...
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