1. What is the Marcus Savings Interest Formula?

The Marcus Savings Account Interest formula calculates the interest earned on a principal amount with daily compounding, which is how Marcus by Goldman Sachs calculates interest on their high-yield savings accounts.

2. How Does the Calculator Work?

The calculator uses the daily compounding formula:

Where:

• \( P \) — Principal amount ($)
• \( r \) — Annual interest rate (decimal, e.g., 0.0365 for 3.65%)
• \( t \) — Time in years
• 365 — Number of compounding periods per year

Explanation: The formula accounts for daily compounding, which means interest is calculated and added to the principal every day, leading to slightly higher returns than simple annual compounding.

3. Importance of Daily Compounding

Details: Daily compounding maximizes your interest earnings because each day's interest calculation is based on the slightly larger balance that includes the previous day's interest.

4. Using the Calculator

Tips: Enter the principal amount in dollars, time period in years, and the annual interest rate as a decimal (e.g., 3.65% = 0.0365). The default rate is set to Marcus's current 3.65% APY.

5. Frequently Asked Questions (FAQ)

Q1: How often does Marcus compound interest?
A: Marcus compounds interest daily and credits it to your account monthly.

Q2: Is the Marcus APY variable?
A: Yes, the APY can change based on market conditions. Check their current rate before calculating.

Q3: Are there any fees that affect interest?
A: Marcus has no monthly fees, so your full balance earns interest.

Q4: How does this compare to simple interest?
A: Daily compounding earns more than simple interest, especially over longer periods.

Q5: Can I use this for other savings accounts?
A: Yes, if they compound daily. Adjust the rate to match the specific account's APY.