Compound interest calculator- Can't find one that works! Any ideas?

[gaussgirl]

Trying to work out whether when we sell our house (abroad, not in the nasty GB market thank god!) whether the interest on the money will pay our UK rent? It will dictate how long we fanny around before buying here.

I need to be able to put in 'x' sum
To be able to select 'Interest calculated daily'
And input 'Interest rate'

I can then extract our rent from the end of the month total, then calculate the next month from that starting point.

Bumping for you.

I can do this, not very elegant though. But unless you have millions then compound daily interest is going to be very little more than straight monthly interest. Why not just multiply capital x interest rate/100/12 for monthly income? in excel use one cell for capital, another cell for interest rate, then in the third cell do =[where capital is] * [cell where interest rate is]/100/12. if interst rate is 4.2% then just put 4.2 into the interest rate cell.

So missing, is this right?

$270000x 4.75, divided by 100, then divided by 12 gives me $1068 per month?

Or am I complete numpty?!

You might find it's a little lower - around 1046 - but you're close. If the quoted annual (APY) figure is 4.75%, normally the compounding is already taken into account.

Presuming they credit interest monthly (this is common, even if it's calculated daily,) the monthly interest rate would be about 0.3875% so you'd get $1046 a month on a $270,000 deposit. Over a year you'd actually receive 4.65% (ish) of your deposit if you are taking out the interest each month (interest on reinvested interest is what takes the APY up to 4.75% - in your case there won't be any as you want to spend the income.)

You might need to bear in mind that the income will be treated as taxable as income as well.

Biggest worry if I were you would be currency swings. When I moved to Amercia last year, $1000 bought $2000. Now it buys about $1300. If you are living on a dollar income but with costs in sterling, any future recovery in the value of sterling could leave you much poorer than you expected....

I meant £1000 bought $2000 of course.... doh.