What equation could I use to calculate the APY where percent interest and number of days are variable?
For instance, suppose I invested $100 and earned 10% interest in 5 days.
Asked
Active
Viewed 28 times
0
-
Do you mean 10% is earned each day (unlikely) or 10% per year "compounded daily" for 5 days? – coffeemath Sep 18 '22 at 19:47
-
I mean after 5 days 10% has been earned. So now I would be at $110 at the 5th day in this example. – EcomEvo Sep 19 '22 at 12:28
-
10% in 5 days would mean 100% in 50 days and considerably more in one year! That is unrealistic interest. Are you sure that's what you mean? – coffeemath Sep 19 '22 at 13:05
-
This is just a simple example. I'm looking to figure out a flexible equation that can convert any variable interest rate over a variable period of days into an APY. – EcomEvo Sep 19 '22 at 16:51
-
OK then one more question: For your example do you mean every 5 days the interest is 10% and you just want the interesst for 365 days? Then a simple proportion will work. If (a)% is earned every $d$ days, and you want the APY (call that $(x)$% per year), set it up as $a/d=x/365,$ It's easy to solve for $x$ here. – coffeemath Sep 19 '22 at 17:58
-
Yep, every 5 days interest earned is 10% ($110 after 5 days), or every 30 days interest earned is 5% ($105 after 30 days), etc etc. – EcomEvo Sep 20 '22 at 15:16
-
Did you agree with my genera formula in last comment? – coffeemath Sep 20 '22 at 15:18
-
I think that should work. Also wondering what in the world happened to the spaces in my previous comment. :-/ – EcomEvo Sep 20 '22 at 15:25
-
Let us continue this discussion in chat. – coffeemath Sep 20 '22 at 16:03