Let’s say I want to save 10,000 per month for two years and the interest for each month is 0.25%, how do I calculate to know my total interest for the two month.
Fokona Latest Questions
Please briefly explain why you feel this question should be reported.
Please briefly explain why you feel this answer should be reported.
Please briefly explain why you feel this user should be reported.
Let’s say I want to save 10,000 per month for two years and the interest for each month is 0.25%, how do I calculate to know my total interest for the two month.
When you contribute ₦10,000 every month and earn 0.25% interest per month, the interest is not earned on the full ₦240,000 from day one. Each monthly deposit earns interest only for the months it remains invested. A simple way to calculate it is: Deposit Months earning interest Interest Month 1: ₦10Read more
When you contribute ₦10,000 every month and earn 0.25% interest per month, the interest is not earned on the full ₦240,000 from day one. Each monthly deposit earns interest only for the months it remains invested.
See lessA simple way to calculate it is:
Deposit
Months earning interest
Interest
Month 1: ₦10,000
24 months
₦10,000 × 0.25% × 24 = ₦600
Month 2: ₦10,000
23 months
₦575
Month 3: ₦10,000
22 months
₦550
…
…
…
Month 24: ₦10,000
1 month
₦25
Total interest:
10,000×0.0025×(24+23+22+…..+1)
The sum of 1 to 24 is:
24×25÷2=300
Therefore:
10,000×0.0025×300
=25×300
=7,500
Result (Simple Interest)
Total contributions: ₦10,000 × 24 = ₦240,000
Total interest: ₦7,500
Final value after 2 years: ₦247,500
If the investment compounds monthly (interest is added to the balance each month), the final amount will be slightly higher, about ₦248,200, giving total interest of roughly ₦8,200.
The difference is small because 0.25% per month equals only about 3% per year, so compounding does not add much over just two years.