Even referencing several articles, I can't seem to figure this out; the dividend rate for a savings for instance with $1,000 says it would be 0.10%, compounded quarterly, to me. That means:
- 1st Quarter it compounds and I get a new balance of $1,001
- 2nd Quarter it compounds and I get a new balance of $1,002
- 3rd Quarter it compounds and I get a new balance of $1,003
- 4th Quarter it compounds and I get a new balance of $1,004
That means, at the end of the year, I've gained $4, or 0.40% yield?, so I would assume my APY was 0.40%, but that rate sheet says an APY of 0.10%, does that mean my new balance at the end of the year is supposed be $1,001 that seems ridiculously wrong.
The mathematical APY calculation here seems to only make it worst, the formula I've seen is (1.00 + dividend rate)^period + 1, that would calculate my APY at which gives me 0.40% APY, which off $1,000 I would understand to be $10 or a new balance of $1,004.
So what is actually happening here? Am I getting $4 (the APY calculator and manually calculating it, did I do something wrong?) Or the $1 (which is what it seems the banks interest sheet says)
Either way, both of those seem really low.