# How can i calculate compound interest?

#1

In a savings account with interest you can calculate it easily, but how would you calculate it for this?

In the time part of the formula, i get lost.

Lets say you make 5% of your balance everyday for the next year. How would you calculate how much you would have in a year, because in the calculation you can’t count everyday, because we can’t trade everyday.

#2

Never mind, i think i got it.

If you made 5% everyday your traded and you traded 20 times in a year you would take the percentage and divide it by the number of days (which is 20) so .05 divided by 20 = .0025, then add 1 so = 1.0025

then you take the 20 and multiply it by the same number (whatever the number of days you trade are) so 20 multiplied by 20 = 400

Now you take 1.0025 and take the 400 and do 1.0025 to the 400th power which = 2.71489174438… lol

then you take 2.71489174438 and multiply it by whatever you started with in your account (let’s say \$500), so 500 multiplied by 2.17489174438 which = \$1357.55 on 20 days with 5% return.

I may be wrong so please correct me if i am.

#3

If you think you would be happy with trading 180 days in the next year & started with \$500 & had an 5% sucess rate …& "let it ride "

\$ 3,258,696 balance … magic of compounding

#4

[quote=melo1112]If you think you would be happy with trading 180 days in the next year & started with \$500 & had an 5% sucess rate …& "let it ride "

\$ 3,258,696 balance … magic of compounding[/quote]

It seems almost unreal.

A few of the people in credit card companies who do this definitely don’t have the persons best interest at heart.

#5

Okay here is a website that does it for you…

Compound Interest Calculator http://www.moneychimp.com/calculator/compound_interest_calculator.htm

In the spot where it says “years to grow” simply put in the time period you are working with. So lets say that you are going to earn 5% a week. You would put in 5% in the interest rate, 52 weeks in the years, (cause we are figuring it over a year, and you wont trade all 52 weeks cause of holidays, etc, but anyway,…) and everything else where it is supposed to go, and let it figure for you. You will have fun with this website, it is simple, but it is fun.

#6

Reminder dont increase size more than 1x a month based on 5% ruke in steward sanity section of forum.