A friend of mine reports that he was paid $1.20 in interest for one month on a balance of 1,445.74 on a savings account at Banco Nacional Panama in September, 2011.
That works out to .83 percent per month.
A(t) = (1 + r/n) ^ nt
t = Total time in years
n = Number of compounding periods per year (note that the total number of compounding periods )
r = Nominal annual interest rate expressed as a decimal. e.g.: 6% = 0.06
A(t) = ( 1 + (.0083)) ^ 12
After one year each dollar is worth 1.1042 dollars for an effective compounded yield of 10.42% about 100 times what Chase Bank is offering.
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