Just a brief question regarding bank interest rates, my apologies if this is a duplicate, I did a quick search but came up with no results relating to my question, surprisingly.
Also, please excuse my ignorance with interest-based math. Once upon a time it all made sense, but I'm severely out of practice.
My bank advertises a .10% interest rate on my specific type of savings account. This interest is compounded monthly. According to their website "Interest [is] calculated each day and paid monthly."
However, with an average of \$1000, I'm credited \$.10 each month. This seems incorrect to me.
Prepare to be baffled by incorrect maths (again, please correct anything I've got wrong, and most likely went on a tangent with):
My thought process so far
If I had \$1000 in my savings account, at .10% interest this should be...
.10% / 100 = .001
\$1000 * .001 = \$1
Therefor I should be receiving \$1/month instead of \$.10/month
It appears I'm being credited only .01% monthly. I hope I'm overlooking something simple, as these are the basics I remember from grade school math regarding percentages, and the way I currently understand the world of math. I'm ready to have my reality ripped from under me though, as long as I'm not losing any money I'm entitled to :)
Any help is appreciated. An ELI5 type answer might be the most helpful, it's been a long week.
I imagine the $.10\%$ quoted rate is annual. So the monthly rate would be $\frac{.10\%}{12}\approx .0083\%=.000083$. That should come out to about $8.3$ cents per month interest on $\$1000$.