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Message: <blockquote data-quote="Justaguy1" data-source="post: 2171108" data-attributes="member: 273350"><p>I had thought calculating the interest you would earn on a savings account would work like this:  Let's say you open a savings account that contains 2,000 and you earn 1% interest on the money monthly.  What I had thought would happen is this, by the month's end you would have earned $20.00 in interest since 1% of 2,000 is $20.00.  At the beginning of the next month, your balance would rise to 2,020 as a result, and so that month you would earn $20.20 in interest since 1% of 2,020 is $20.20, which would bring the balance the following month to 2,040.20 and so on.  Is my understanding correct?</p></blockquote><p></p>