Each point costs a fee equal to 1 percent of the loan amount and typically reduces your mortgage rate by about one-eighth of a percentage point. So if you're borrowing $250,000 and the standard interest rate is 4.00 percent, you can buy a point for $2,500 and reduce your rate to 3.875 percent.
How much should you save every month? Many sources recommend saving 20 percent of your income every month. According to the popular 50/30/20 rule, you should reserve 50 percent of your budget for essentials like rent and food, 30 percent for discretionary spending, and at least 20 percent for savings. We agree with the recommendation to save 20 percent of your monthly income.
Calculate the bank interest earned on your savings account on a single deposit after a term of 1 year. The compound interest formula will help you determine the interest earned on your savings account with a single deposit and when the interest is compounded daily, monthly or quarterly.1  Determine the variables used in the standard compound interest formula to calculate the interest earned on your savings account.. Use the accumulated savings formula to determine interest. Calculate the interest earned on your savings account with recurring monthly deposits and interest compounded daily, monthly or quarterly. 1  Use the accumulated savings formula to calculate the interest earned when recurring deposits are made.