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Calculating monthly versus annual returns
February 5, 2014
9:50 am
Loonie
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I am a bit foggy on how to figure out whether it is better, with GICs, when one has the option, to ask for a monthly payout or an annual one, or some other configuration.

Assuming no immediate need for the money and assuming the income is equally sheltered or not sheltered either way, is there some sort of mathematical formula that I can apply to figure this out? An online tool would be great, but I haven't found one.

My calculator finger is getting worn out trying to do this manually every time, and I make mistakes and have to do it all over again!

February 5, 2014
10:04 am
kanaka
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Try this. Not exactly what you are looking for. An annual pay out will give you more than a monthly pay out.

http://www.moneychimp.com/calc.....ulator.htm

If you are into Excel I can send you some of the calculations to use.

February 5, 2014
5:46 pm
Loonie
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Thanks, guys. I guess it's good to know I'm not the only one who hasn't found the magic button to press on this question.
Alas, I haven't mastered Excel, but no doubt should.

February 5, 2014
5:47 pm
Loonie
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Perhaps the best thing would be to ask the financial institution which is making the offer to figure it out, i.e. ask them what exactly would be the returns for the various configurations. That would be slower, but perhaps more reliable than me trying to figure it out and not knowing if I did it right!

February 5, 2014
6:40 pm
kanaka
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Try Outlook Financial. They have a calculator on their web site. I cannot confirm what it does as it won't run on my ipad.

February 5, 2014
10:04 pm
Loonie
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Doesn't work on my computer either due to security issues apparently.

February 5, 2014
10:14 pm
Loonie
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