Cryptocurrency Q&A
What is 5 APY on $1000?
What is 5 APY on $1000?
Riccardo
Mon Nov 18 2024
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6 answers
1338
I have $1000 and I want to know how much interest I can earn if the annual percentage yield is 5%.
6 answers
SumoPowerful
Wed Nov 20 2024
Putting $1,000 into an account with an annual interest rate of 5% would theoretically yield $50 in interest at the end of the year.
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GyeongjuGloryDaysFestival
Wed Nov 20 2024
This calculation assumes that interest is compounded annually, meaning that interest is only added to the principal at the end of the year.
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CryptoPioneerGuard
Tue Nov 19 2024
However, if the interest rate remains at 5% but interest is earned and compounded monthly, the effective annual percentage yield (APY) would be slightly higher.
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Sara
Tue Nov 19 2024
In this scenario, the APY would be 5.116%, reflecting the fact that interest is being added to the account more frequently.
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isabella_cole_psychologist
Tue Nov 19 2024
As a result, by the end of the first year, the account would have grown to $1,051.16, rather than just $1,050 as it would have with annual compounding.
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