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% Gross v % AER
Bogart99
Posts: 12 Forumite
The Northern Rock pay 2.75% Gross which obviously equates to an AER of 2.75% on interest paid annually, they 2.72% Gross on interest paid monthly which equates to just the same AER of 2.75%
My question is why do they have the two interest paying options as the AERs are the same?
My question is why do they have the two interest paying options as the AERs are the same?
0
Comments
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Some people need/want a monthly income from their savings.0
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2.72% gross means that the monthly rate is 2.72%/12 = 0.222667% per month
and 0.222667% per month compounded over the year is 2.75% i.e. ( (1+0.222667%) power 12 -1) = 2.75% APR0
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