CPF OA rate @ 2.5% on regular CPF investment income peanuts return???

“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”

― Albert Einstein

 

 

 

 

CPF OA rate @ 2.5% on regular CPF investment income peanuts return???

 

 

What Uncel8888 has realised on his yearly dividend from Kep Corp credited to his CPF Investment Account.

 

Taking a conservative approach to compute yearly interest earned based on principal (accumulated dividends and interests) at the next year end.

 

For example:

 

The calculation is as follows for the first three year:

 

 

Year 1: Dividend = $0.50, Principal = $0, Interest earned = $0

Year 2: Dividend = $0.32, Principal = $0.50, Interest earned = $0.0125

Year 3: Dividend = $0.30, Principal = $0.833 ($0.50+0.32+0.0125), Interest earned = $0.0208

 

 

 

 

 

Additional investment return on Kep Corp arising from yearly compounded return at CPF 2.5% rate is 66% or annualised return at 4.7% over 13 years.

 

Not really peanut return. Right?

 

 

 

“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”   

― Albert Einstein