View Full Version : CD Investing
Tempelritter
Jan 31, 2008, 07:03 PM
Dear Sir,
I have a question about CD's. I would like to know haw you can figure out the rate of interest that you would earn. If I deposit $5000.00 for three months @ 2.8%APR, how much would my investment bring me?
I am new to investing my money and would like to learn how this works. Tank you so much.
oneguyinohio
Jan 31, 2008, 07:09 PM
Multiply the 5000 by the 2.8% then divide that by 4 since you only plan to leave it there for 3 months rather than 12. That should get you pretty close to the amount.
Fastfun1
Feb 1, 2008, 04:37 PM
Multiply the 5000 by the 2.8% then divide that by 4 since you only plan to leave it there for 3 months rather than 12. That should get you pretty close to the amount.
umm... you, it doesn't get much easier than that. Seeing as though flexible CDs are not longer offered, the 2.8% is not variable. So, $5,000 x 1.28 = $6,400/4 = $1,600. So, you net $650.
oneguyinohio
Feb 1, 2008, 09:10 PM
$650 seems a bit high. It's only 2 point 8 percent interest, not 28...
1000 dollars would bring in $28/year, so 5000 would be $140/year.
Since its only for 3 months, we're looking at about $35...
Fastfun1
Feb 2, 2008, 07:27 AM
Your right, Ohio. Review my equation, and the error is obvious. Rather than use 1.028, I used 1.28, which would be a rather large yield. Let's try that again: $5,000 x 1.028 = $5,140/4 = $1,285, netting $35. Good call...
oneguyinohio
Feb 2, 2008, 09:27 AM
I just figured the decimal point was hard to see... I've made a lot bigger errors before~