The Motley Fool Discussion Boards Previous Page Investing/Strategies / Retirement Investing URL:  http://boards.fool.com/just-one-comment-on-this-getting-1-per-month-is-11371020.aspx Subject:  Re: Pension figured into Networth??? Date:  10/14/1999  9:30 AM Author:  Helter Number:  14519 of 88775 Just one comment on this:Getting 1% per month is better than getting 12% per year.1.01 to the 12th power i.e. compound interest = 1.126825 or over 12.5% per year.If you are compounding over a long period of years - that 1/2 % can really add up.1000 for 30 years at 12% per year = 29,959.921000 for 30 years at 1% per month = 35,949.64So for each \$1,000 in your calculation - you get a difference 30 years out of about \$5,000so rather than dividing your yearly interest rate by 12 to get monthly - take the 12th root of 1+the interest rate. In excel that's=1.12^(1/12) which comes out at 1.009489 so .9489% per month is 12% per year.Helter Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us