Interests at 2% overrated? Or am I getting it wrong?

[Jesus_ist_König]

I wrote it in german and chatgpt translated it

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So I have this thing (won’t go into details), and I get 2% interest per year on it, which is pretty high by today’s standards.


The interest is calculated daily, so here’s the formula for the end of a given number of days:

K0 = money in the account
Round brackets = growth factor per day
“−1” = (account balance + interest) − account balance, i.e. to see how much money was added

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And if we take €500 as an example, after one year I would have earned only about 10.10€ more
Isn’t that very little?


The thing is, humans aren’t good at thinking exponentially.


But even with €8,000, I would only get about €160 after a year.

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What do you think — are interest rates overrated?

 

[brootaldude]

I wrote it in german and chatgpt translated it

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So I have this thing (won’t go into details), and I get 2% interest per year on it, which is pretty high by today’s standards.


The interest is calculated daily, so here’s the formula for the end of a given number of days:
View attachment 4787834
K0 = money in the account
Round brackets = growth factor per day
“−1” = (account balance + interest) − account balance, i.e. to see how much money was added

---

And if we take €500 as an example, after one year I would have earned only about 10.10€ more
Isn’t that very little?


The thing is, humans aren’t good at thinking exponentially.


But even with €8,000, I would only get about €160 after a year.

---

What do you think — are interest rates overrated?

isn’t it just a bank deposit? don’t think it even surpasses inflation and the best one is just putting it into hedge funds since they invest it more risky and the return is a lot higher while the risk isn’t even that high

 

[India lover 52]

2% interest is horrible even a basic bank savings account is like 5% and index funds average 10% yearly

 

[Jesus_ist_König]

2% interest is horrible even a basic bank savings account is like 5% and index funds average 10% yearly

Dang thanks