1. What is the Marcus Savings Formula?

The Marcus Sachs Savings formula calculates the future value of an investment with daily compounding interest. It's particularly useful for high-yield savings accounts like Marcus by Goldman Sachs® that offer competitive APY (Annual Percentage Yield).

2. How Does the Calculator Work?

The calculator uses the daily compounding formula:

Where:

• \( A \) — Final amount ($)
• \( P \) — Principal investment amount ($)
• \( r \) — Annual interest rate (decimal, e.g., 0.0365 for 3.65%)
• \( t \) — Time the money is invested for (years)

Explanation: The formula accounts for daily compounding (365 times per year), which maximizes growth compared to simple interest or less frequent compounding.

3. Importance of Daily Compounding

Details: Daily compounding means interest is calculated and added to the account balance every day, leading to exponential growth over time. This makes a significant difference in long-term savings.

4. Using the Calculator

Tips: Enter the principal amount in dollars, time period in years, and annual interest rate as a decimal (e.g., 3.65% = 0.0365). The calculator will show the final amount after daily compounding.

5. Frequently Asked Questions (FAQ)

Q1: How does this compare to monthly compounding?
A: Daily compounding typically yields slightly higher returns than monthly compounding due to more frequent interest calculations.

Q2: What's the current Marcus savings APY?
A: As of 2023, Marcus offers 3.65% APY (0.0365 decimal), but rates may change. Check their website for current rates.

Q3: Are there any fees with Marcus savings?
A: Marcus has no account fees, but always verify with the bank as policies may change.

Q4: How often is interest paid?
A: Interest is typically credited monthly, even though it compounds daily.

Q5: Is there a minimum balance requirement?
A: Marcus has no minimum balance requirement to earn the APY.