Simple interest vs compound conversion pls

veryintrigued

Hi there

Just looking at a product which is offering 4.5% per annum (not compounded) for up to 5 years. Its a kick out deposit fund. So term could be 2,3,4 or 5 years depending on how FTSE performs.

To make it simple (for me!!) I guess if 10k was invested that makes £450 interest per year every year.

Hence my question is over 5 years what does this 4.5% (simple interest) compare to in compound interest terms?

I think its might be around 4.15% with playing around compound interest calculators.

Does this sound sensible?

Thanks as always!!

grey_gym_sock

( (1 + (4.5 / 100 * 5)) ** (1 / 5) - 1 ) * 100 = 4.14