# How to calculate the interest on my security deposit to my landlord?

Quoted from http://www.oag.state.md.us/Consumer/landlords.htm#deposits, here is the way to calculate the interest on security deposit a landlord in Maryland pays to his tenant:

The landlord must put the security deposit in an escrow account. When returning security deposits of \$50 or more, the landlord must include simple interest of 3 percent per year, accrued at six-month intervals from the date the security deposit was paid (1.5 percent every six-month period).

I don't quite understand the meaning of the last part in bold.

In my case , I rent a room for \$437.5/month for the first 3 months, and then switched to another room under another lease for \$350/month for the next 5 years and 2 months (actually it is the next 5 years and 3 months, but at the beginning of the last month, the landlord agreed to use my security deposit as my rent). My security deposit has been the same as one month rent, and there was \$437.5-350 refund to me at the time of room switch.

If the quote doesn't have the part in bold, I think the interest in my security deposit is:

``````\$437.5*0.03*3/12 + 350*0.03*(5+2/12) = 57.53
``````

I wonder if my calculation is correct?

How the calculation be changed when considering the part in bold?

Thanks!

• You didn't actually say how much the security deposit was. Can we assume it's one month's rent for the first apartment? i.e. \$437.5? – DJClayworth Aug 16 '12 at 19:24
• @DJClayworth: My security deposit has been the same as one month rent, and there was \$437.5-350 refund to me at the time of room switch. – Tim Aug 16 '12 at 19:38

Since you received a refund on your deposit most likely the landlord refunded the deposit then made a new deposit into an account for the new appartment. So since you were not there for 6 months you accrued no interest for the time in the first apartment.

Then for the next 62 months you accrued interest 10 times (once every 6 months). So based off of the formula for calculation of the interest owed is :

(deposit amount)(1+ ((interest rate per 6 months)/100))^(whole number of 6 month periods at deposit was held)