How do I calculate the interest earned on a savings account?
Dividing the Annual RateCalculate the periodic interest rate on the savings account by dividing the annual rate by the number of times interest is compounded per year. Most savings accounts compound interest on a monthly basis, so if your savings account paid 1.8 percent per year, you would divide 0.018 (1.8 percent) by 12 to find the periodic rate to be 0.0015.Determine Compounding PeriodsCalculate the number of compounding periods the money will be left in the account for by multiplying the number of times interest is compounded per year.
