Estimate Interest Earned

Willsie01

I have a savings account that applies interest once a year. How do I estimate the interest earned on the opening balance deposited about 6 months ago?

pramsay13

I would estimate it to be around 50% of the total. 

nottsphil

pramsay13 said:

I would estimate it to be around 50% of the total. 

The total of the balance, or the total of the annual interest that s/he can't work out?

EDIT: OP 5.05% per annum means you get £5.05 per £100 kept in for a year, so just divide the AER by 36600 to get the daily percentage on your capital. Then do some counting and a multiplication.
Eg 5.05% per annum on £200 would be 5.05 ÷ 36600 x 183 (days) x 200(£) = £5.05 interest over those six months. Can you see how doubling the capital but halving the year produces the same amount of interest?

Albermarle

Willsie01 said:

I have a savings account that applies interest once a year. How do I estimate the interest earned on the opening balance deposited about 6 months ago?

If the interest rate is 5%, then multiply the whole amount by 2.5% to get 6 months interest.

eskbanker

nottsphil said:

pramsay13 said:

I would estimate it to be around 50% of the total. 

The total of the balance, or the total of the annual interest that s/he can't work out?

OP just divide the APR  by 366 to get the daily rate of interest. Then do some counting and a multiplication.

If OP is just looking at estimating then halving the annual interest seems adequate.

If they're looking to work it out more accurately than that, then calculations should be based on the gross interest rate rather than the AER (APR is for loans) but for an account paying annually these should be the same.