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Math Help - Percent Deductions (Similar To Interest Rates)

  1. #1
    Junior Member
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    Percent 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?
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  2. #2
    MHF Contributor
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    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
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