Let's say I have 100 and it's in an account that is charged 2% per year.

This fee deduction is taken out every month.

Each month, would the fee be:

1.) CurrentAccountValue * (.02/12)

2.) CurrentAccountValue * ((1.02^(1/12))-1)

3.) Something else?

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- Jul 7th 2010, 07:31 AMsomaPercent Deductions (Similar To Interest Rates)
Let's say I have 100 and it's in an account that is charged 2% per year.

This fee deduction is taken out every month.

Each month, would the fee be:

1.) CurrentAccountValue * (.02/12)

2.) CurrentAccountValue * ((1.02^(1/12))-1)

3.) Something else? - Jul 7th 2010, 08:00 AMWilmer
Treat EXACTLY like an interest rate, except deduct the "i":

i = .02/12 ; n = number of months

interest: 100(1 + i)^n

fee: 100(1 - i)^n