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warcho , (edited )

interest rates are usually an annual rate and accrue monthly. You seem to have applied the interest percentage of 1% to every deposit which is incorrect. Each deposit should gain that amount every year. For example, if you deposited $10 last year now it would be $10.10. If you deposited $10 2 years ago it would now be $10.201 due to the interest compounding.

lumberjacked ,
@lumberjacked@lemmy.world avatar

I agree.

Also check out Greenlight which has a built in parents interest feature.

RecallMadness ,

Interest is usually calculated as a daily accrual of the EOD balance, then applied monthly.

Some systems will actually do the accrual daily and store the balance in a shadow account, others will just calculate the interest when it is applied.

So if you had $100,000 in your account for just one day and nothing else for the rest of the year, at 5% interest you would earn 100000 * 0.05 / 365 = $13.69

wulf OP ,

This seems like the best answer, it’s still not exact since interest changes daily (at least in the U.S) and interest compounds monthly.

But I changed the interest formula to:

Number of Days * Interest Rate * (Last Balance + Deposit) / 365

That seems to be more accurate.

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