Interesting - Nationwide Flex Regular Saver 8% AER

Exodi

[Deleted User] said:

Nationwide’s product page states that interest is calculated daily and compounding must be in use because AER = (1 + (r/n))^n – 1 is a compound equation.

The FV function uses the nominal rate, you have used the effective rate or AER so your use of the FV function appears to be inappropriate.

In my previous reply do the following:

2.     In cell C1, enter the following formula to calculate the interest for that month:

=A$1*(POWER(1+Nominal(A$2, A$3)/A$3, A$3*B1/12)-1)

Observe use of Excel Function Nominal to obtain the nominal rate r.

In the online calculator the rate field is nominal not effective, one should not enter an AER value. Entering 7.81% will give the £104 required, note however that the AER value will inflate to 8.1%. To calculate AER in Excel, use the Effect function.

As usual, you continue to stick your fingers in your ears and tell us how you think it works, instead of listening to how it actually works. I've told you enough times, everyone has.

Nationwide does not compound interest on this product. I don't know why you keep trying to pretend they do or use compounding formulas on the pretense that they do. You don't need to use the nominal function, I can tell you the nominal rate... it's 8%. The FV function as I used it is appropriate because I've applied it for individual periods and have not compounded on the previous - just like the Nationwide product. The amounts also line up. They also line up with the calculator site you linked earlier. I don't understand why you keep linking basic compounding formulas in response.

I've never seen someone so reluctant to just admit they were wrong. You're also accusing the largest building society in the world of being unable to calculate the interest on their own products. All regular savings products work like this:

E.g. https://www.firstdirect.com/savings-and-investments/savings/regular-saver-account/

Using the FV formula above I get £136.50, which is the same as their interest example.



But I'm sure you're about to inform me that First Direct is also wrong in their estimate.

You mention the online calculator, I've already linked you a screenshot with the correct details entered outputting the correct result. Just stop.

EDIT: actually, I'm disappointed in myself that I keep coming back and feeding you when I'm almost certain that after this many responses you can't still be as confused as you make out - so this will be my last reply on this thread. Sorry everyone for fueling it. Hopefully someone that's not on a wind up can get some value from it at least. I did report it to be closed but it appears as if the mods have removed it from the board list instead.