Maya Savings Interest Rate Calculator

Compound Interest Formula:

\[ FV = P \times (1 + \frac{r}{n})^{(n \times t)} \]

Principal Amount (P):

PHP

Annual Interest Rate (r):

decimal

Compounding Periods (n):

per year

Time (t):

years

Future Value (FV):

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1. What is the Compound Interest Formula?

The compound interest formula calculates the future value of an investment or savings account where interest is earned on both the initial principal and the accumulated interest from previous periods. This formula is essential for understanding how savings grow over time.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

\[ FV = P \times (1 + \frac{r}{n})^{(n \times t)} \]

Where:

\( FV \) — Future Value (PHP)
\( P \) — Principal Amount (PHP)
\( r \) — Annual Interest Rate (decimal)
\( n \) — Compounding Periods per Year
\( t \) — Time in Years

Explanation: The formula calculates how much your initial investment will grow based on the interest rate, compounding frequency, and time period.

3. Importance of Compound Interest Calculation

Details: Understanding compound interest is crucial for financial planning, savings growth estimation, and making informed investment decisions. It helps individuals plan for long-term financial goals and maximize their savings potential.

4. Using the Calculator

Tips: Enter the principal amount in PHP, annual interest rate as a decimal (e.g., 0.05 for 5%), number of compounding periods per year, and time in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the difference between simple and compound interest?
A: Simple interest is calculated only on the principal amount, while compound interest is calculated on both the principal and accumulated interest, leading to faster growth over time.

Q2: How often does Maya savings account compound interest?
A: Maya savings accounts typically compound interest daily, but you should check the specific terms of your account as compounding frequencies may vary.

Q3: What is a good interest rate for savings in the Philippines?
A: Interest rates vary by bank and account type. As of 2024, digital banks like Maya often offer higher rates (3-6% p.a.) compared to traditional banks (0.1-1% p.a.).

Q4: Are there taxes on savings interest in the Philippines?
A: Yes, interest income from Philippine peso bank deposits is subject to 20% final withholding tax, unless exempted under specific conditions.

Q5: Can I use this calculator for other types of investments?
A: While designed for savings accounts, this calculator can be used for any investment that compounds interest, though it doesn't account for additional contributions or withdrawals.