1. What is the Marcus Savings Formula?

The Marcus Savings formula calculates the future value of an investment with daily compounding interest. Marcus by Goldman Sachs offers high-yield savings accounts with competitive APY (Annual Percentage Yield) rates.

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, which means interest is calculated on both the initial principal and the accumulated interest from previous periods.

3. Importance of Daily Compounding

Details: Daily compounding allows your money to grow faster than simple interest or less frequent compounding because you earn interest on interest more frequently.

4. Using the Calculator

Tips: Enter principal amount in dollars, time period in years, and annual interest rate as a decimal (e.g., 0.0365 for 3.65%). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why use daily compounding instead of simple interest?
A: Daily compounding maximizes your earnings by calculating interest on both your principal and previously earned interest every day.

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

Q3: How often is interest paid out?
A: Marcus pays interest monthly, but it compounds daily for maximum growth.

Q4: Are there any fees with Marcus savings accounts?
A: Marcus has no monthly maintenance fees or minimum balance requirements.

Q5: How does this compare to other compounding frequencies?
A: Daily compounding yields slightly more than monthly or quarterly compounding, especially over longer periods.