A bank deposit helps to reduce the depreciation of money (which can be achieved by keeping it in the form of cash, for example, at home).
- term of the deposit;
- interest rate;
- Deposit amount.
- interest accrual period (once a month, once a year or at the end of the deposit term);
- the possibility of additional or partial withdrawal of funds from the account;
- conditions for early closure of the deposit, etc.
Sp = P x I/100 x t/k
Sp is the amount of interest (income);
P is the amount of funds raised in the deposit;
I is the annual interest rate;
t is the number of days of interest accrual on the attracted deposit;
K is the number of days in a calendar year or months (if interest is accrued monthly).
When considering options for investing funds in a deposit, it is necessary to calculate the income that will be received at the end of the term of the deposit. Only after calculating the amount of planned income, it is necessary to make a decision on investment.
The calculation is based on the simple interest formula. It is applied if the interest on the deposit is accrued on the initial deposit amount each time during the entire term of the agreement. At the same time, the amount of accrued interest on the deposit is added to it only after its expiration or is generally transferred to a separate account.
Example:
Let's assume that Ivan put 10,000 dollars on the deposit for a period of 1 year. The interest rate is 10% per annum. It is necessary to find out: what profit will Ivan receive at the end of the term of the deposit?
Solution:
If the deposit is for 1 year, then for the term of the deposit Ivan will receive 10% of the initial amount. You can solve the problem by making a proportion:
10,000 = 100%
X - %X10
X = 10,000 x 10% / 100%
X = $1,000
Answer: Ivan will make a profit of $1,000.
When choosing the type of deposit, you should pay attention to the procedure for calculating interest.
If the interest rate on the deposit is indicated as "... % per annum", and the term of the deposit is less than a year, it is necessary to calculate this rate for the period for which the funds are placed on the deposit.
Example:
Let's assume that Ivan deposited 5,000 dollars for a period of 3 months at an interest rate of 6% per annum. It is necessary to find out: what profit will Ivan receive at the end of the term of the deposit?
Solution:
First, you need to calculate the interest rate for a period of 3 months.
3/12 = 1/4 = 0.25
The interest rate for 3 months will be:
X -> 1,5%
X = 5,000 x 1.5% / 100
X = $75
Answer: Ivan will make a profit of $75 in three months.