Annual Cash Example

Annual cash or annual cash percentage is understood as annual cash interest.

It is the interest earned within a year, it is usually managed or used by banks and investment institutions, to promote investments that are generally between 10% or 11% that are subsequently divided between the 12 months of the year.

This index measures or frames the profitability of the investments made in this investment regime.

Annual cash example:

José Luis Vieira Rosas, is a person who has worked for 15 continuous years, and kept his money in a bank, using only what was necessary for his subsistence.

In an advertisement inside the bank in which he has kept his money, he saw an advertisement that promised to give him 11% annual effective interest investing from 1,000,000.00. (One million pesos). But for the corresponding cash to be delivered it is necessary that the amount is in the bank for the entire term and not be withdrawn.

In the event that 10% is delivered annually and an amount of 1,000,000.00 (one million) is invested, the final amount divided between the 12 months would be .833% per month, that converted into cash would be 8,333.00 (eight thousand three hundred thirty-three pesos) per year and the months are divided into terms of 28 days distributed throughout the year.

This benefit improves widely the more the amount to invest, for which José Luis decided to make an investment with an amount of 12,000,000.00 (twelve million pesos), which is half the salary that he has saved in his savings account after having done work for two companies different.

Finally, he receives a total of .83% per month and in net capital 99,600.00 pesos per month that when collected at the end of the year would be 1,195,200.