Can someone interpret this please? (Finance)

[The_Ogre]

http://www.standardbank.co.za/porta...toid=64c808f82045b210VgnVCM100000c509600aRCRD

I'm confuzzled. Say I want to open an account with 10k over 36 months.

How do I calculate the final amount?

 

[hellfire]

http://www.standardbank.co.za/porta...toid=64c808f82045b210VgnVCM100000c509600aRCRD

I'm confuzzled. Say I want to open an account with 10k over 36 months.

How do I calculate the final amount?

the 5.35% is the actual interest rate applied each month.
The 5.65% is the effective interest rate (compound) if you don't take the interest out over the term of the deposit

 

[The_Ogre]

the 5.35% is the actual interest rate applied each month.
The 5.65% is the effective interest rate (compound) if you don't take the interest out over the term of the deposit

OK, so after month 1 the total amount would grow to R10 535 or not? Sorry, I'm no guru with these kinds of things

 

[The_Ogre]

Where's all the financial guru's when you need them?

 

[broloks]

from website "Interest rates are quoted as per annum rates", so after one month you will have
R10000 x (1 + 5.35/(100 x 12)) = R10044.58

After 36 months you will have R10000 x (1 + 36 x 5.65/(100 x 12)) = R11695

 

[ElecEng]

no to everyone so far! 10k will attract an annual effective interest rate of 5.85%. To calculate the monthly interest: 10000*5.4/12/100 = R45 for the first month, the second month is the same formula except you will earn interest on the R45 too. i.e. 10045*5.4/12/100 = R45.20, etc

 

[The_Ogre]

from website "Interest rates are quoted as per annum rates", so after one month you will have
R10000 x (1 + 5.35/(100 x 12)) = R10044.58

After 36 months you will have R10000 x (1 + 36 x 5.65/(100 x 12)) = R11695

Ah, thanks!

 

[The_Ogre]

no to everyone so far! 10k will attract an annual effective interest rate of 5.85%. To calculate the monthly interest: 10000*5.4/12/100 = R45 for the first month, the second month is the same formula except you will earn interest on the R45 too. i.e. 10045*5.4/12/100 = R45.20, etc

Makes sense. I knew I was reading things wrong

 

[Billy]

Don't they teach Percentages, simple and compound interest at schools any more?

 

[The_Ogre]

Don't they teach Percentages, simple and compound interest at schools any more?

Have you looked at the site I linked to?

What I needed clarification of was the values under Interest Monthly (5.4%) and Interest at Maturity (5.85%). Now I might be wrong, but that will confuse most lay people as to which value to use, and even more so by the fact that they say "Interest Monthly"

 

[Billy]

Have you looked at the site I linked to?

What I needed clarification of was the values under Interest Monthly (5.4%) and Interest at Maturity (5.85%). Now I might be wrong, but that will confuse most lay people as to which value to use, and even more so by the fact that they say "Interest Monthly"

However they do state that "Interest rates are quoted as per annum rates" so it really should not confuse anyone that reads the advert.