![APRCalculatorUpdate.gif](https://images.hive.blog/DQmTkTVCjyZUAr11dDSS4HNii2BwToSgBm7A92NtaRHRAAC/APRCalculatorUpdate.gif)


<br>I’m not sure if anybody else is using the [APR calculator](https://leofinance.io/@jazzhero/apr-calculator-discord-bot-get-your-hbd-earnings-game-going) function I added to our Discord bot last week. But it has at least helped me set up my HBD savings and weekly top-up goals, so the effort to code was worth it. It was possible to calculate it manually, but a Discord bot doing it is much more convenient. 😄


<br>A couple of users have mentioned that it’s better to incorporate **compound interest** into the bot's calculations. I already thought of it while I was starting to create the function. But then dismissed the idea because there’s already a “weekly top-up” calculation and considered compounded interest less significant. However, after looking at it deeper, I realized I was wrong. Compound interest has a much bigger impact on earnings than I assumed.


<br>**So here's version 2.0 of our HivePhBot's APR Interest Calculator.** <br>Check it out on Discord!

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#### Compounding Interest Calculation Update

<br>Compounding happens when the new interest is calculated based on the starting balance and all the previously accumulated interest.

Consider an initial balance or principal amount of **100 HBD**. It will earn an interest of **1.64 HBD** for its first month. When the compounding option is available, the next interest calculation will use **101.64 HBD** (principal plus previous interest), instead of the starting 100 HBD. The next interest earning won’t seem much because it’s only **1.67 HBD**, just **0.03 HBD** higher than the previous. But the real magic happens when you let compounding do its work for long periods.

<br>Here’s the bot calculation for the APR earnings of a **100 HBD** principal over a year with **20% APR**. I made it a point to both include the figures for when interest is compounded (left) and when it’s not (right).

<center>![image.png](https://images.hive.blog/DQmdQRYcaDGTgwVpEsVS6GJTwawHWrvopZP1YauLBVcPFYc/image.png)</center>

In the second month, there’s only **0.03 HBD** interest increase. But when compounded in a year, your 20% APR would yield an extra **1.944 HBD**. This is for a 100 HBD balance. If you invest more, then increase on earnings will be much more exciting too.

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#### How to do Compounding in HBD Savings

<br>You may wonder why I calculated compound interest for a month’s duration. It’s because users are only allowed to claim HBD savings interest every **30 days**. Whenever a claim is successfully processed, you'd have to wait 30 days to do the next.

After claiming the interest, you’d have to re-invest it by transferring the HBD amount you earned to Savings at the soonest possible time. If you didn’t do this step, then compounding doesn’t happen.

I have yet to explore options on how to automatically do claims of interest and direct transfer to savings. Since my goal is to regularly execute HBD Savings top-ups whenever I get my author rewards, I am not too compelled to look for automatic options. I can do it manually since I’m regularly checking my Hive account.

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#### More Examples of the Impact of Compounding

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The **!apr** command is available to all users of servers with the **HiveBotPH** Discord bot. You can either type the command on a channel that the bot has access to, or privately send the bot a direct message. Take note that command parameters didn’t change after this update.

`!apr STARTING_HBD_BALANCE OPTIONAL_WEEKLY_HBD_TOPUP`
 
 
<br>Here are more examples highlighting the difference in earnings with and without compounding.

<br>When you start with something as high as **2000 HBD**, the gap between the two calculations is really much more prominent. 

<center>
![image.png](https://images.hive.blog/DQmQXjcKc3H5JeZgY32XwRwqgwKwz6EYmBDWq5jYVbM6eiT/image.png)</center>

<br>And here’s my humbler personal target for my HBD Savings. With around **300 HBD** starting balance, I aim to add at least **20 HBD** weekly into my Savings. Of course, I’ll make sure to re-invest whatever interest I earn monthly to get that **10+ HBD** increase.

<center>
![image.png](https://images.hive.blog/DQmSSMStHJ4pBxhundtc7efbG5qvaXDEPHrn56hZvDS6fE1/image.png)
</center>

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**If you have any questions or suggestions, just leave it in the comments section below. Cheers!**
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<b>Want to earn while having fun? <a href="https://splinterlands.com?ref=minnowlife">Join Splinterlands</a>.</b>
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<b>Like the thumbnail on this post? Make your own using <a href="https://www.canva.com/join/zpf-jhx-pyd">Canva</a>.</b>
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<i>Attributions:</i><br>
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Images created with <a href="https://www.canva.com/">Canva</a>.  Cute Discord bot avatar is created with <a href="https://charat.me/">Charat.me</a>. Also, several screenshots from Discord.</sub>
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