Maths question:

Right then, I humbly acknowledge that I’m in sharp company when it comes to numeracy.

So here’s the mission, if you choose to accept it.

I want to save £2500 a month for X months at an AER of 3% and would like to know the interest accrued (compound).

What’s the formula, please?

(Can this be expressed through a spreadsheet so that one can play with the numbers?)

And, by the way, this isn’t a trap - I’m nowhere near as bright as I look :blush:.

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I always use this website :joy::joy: useful to project regular withdrawals too!


Well, that’ll do nicely, thank you. :relieved:

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As a crude approximation you can do

2500 x 12 x 0.03 x 0.5

For more precision use an online calculator like the one mentioned earlier or use a spreadsheet to calculate interest for each month ** and then sum.

** [Balance during that month] x [gross interest] ÷ 12. Won’t be exact as interest is calculated daily but will be close enough.

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The formula for this is as follows:


For example, 2500*(1+(0.03/12*4)) = 2525

It’ll never be exact though, with the way banks actually tally the interest. And it can vary by bank too. But it’s a pretty accurate rounding.


  1. I need to learn to read. For just the interest amount omit the 1. So AMOUNT*(RATE/12*MONTHS)

  2. For compound it’s slightly more complicated: AMOUNT*(1+(RATE/12))^((12)(1/12*MONTHS)). Again, for just the interest value, omit the 1.

For example 2500*(1+(0.03/12))^((12)(1/12*4))

Some of the brackets I’m using are redundant, but I’ve included them to make it easier to follow.


Thanks folks, reliable as ever :blush:

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I didn’t read your post properly, so I’ve updated mine for another formula, and what to do if you just want to compute the interest, not your total amount after accruing interest.

Hope it helps. You should be able to adapt the formula for spreadsheet software, but I wouldn’t know how you do it.

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Thanks @N26throwaway, every day’s a school day :grin:

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This is my go to

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