May 21, 2012 Leave a comment
Now that banks and other financial institutions are having to compete to raise deposits from the public,quite a few are resorting to a bit of window dressing.They quote annual yields,annualized returns or simple interest rates instead of compound interest rates for multi-year deposits.
Now a simple interest rate looks more impressive than a compound interest rate over longer periods of time ;so do check what sort of interest the seller is offering before locking your money away at a rate that looks great.
Here is a simple step-by-step way that you can use to mentally estimate the compound interest rate that is equal to any simple interest rate. Read more of this post