My credit union is offering a 15 mo fixed rate CD at 3.5% with a minimum $5000 deposit. What does that come to after 15 months? I dont know how to calculate this stuff. Thanks

 

Quick, back of the envelope calculation (monthly) and I got $5223.27 for 15 months at 3.5%.

 

http://www.bankrate.com/brm/rate/calc_home.asp

$5,269 (if compounded daily). So an net gain of 5.38%

 

I get $5218.75, but I'm not up to date on my finance equations, I've drank a few times since I last used them.

 

Thanks guys. So its really not a big pay off in the end unless you throw in like 10k.

 

It's not a big pay off in general. I'd rather jam the money into an EMigrant account and earn 3.25% without having to leave it in a CD for 15 mos.

 

You can leave the money liquid and if there is an emergency, there's no penalty to withdraw funds.

 

How did you get this? I am trying to see what the right answer is on this calculator.

Is it that the 3.5% is not the actual rate?

 

Huh? You just put in $5,000, 18 mo. 3.5%. And it spits out your ending total after 18 months. Simple.

 

Calculation is

Principal x daily interest rate x number of days

The key to knowing the exact rate is knowing the daily rate. 3.5% is the anual rate for the year. So you need to know how the daily rate is calculated. Typically, it is cacluated using a 360 day year. Also, you have to know the exact number of days that within that 15-mo. period. But that is if you need the EXACT amt. of return. To get an estimate, then I would use 30 days per every month within the 15 mo. period so thats 450 days. The calculaton would be as such:

$5,000 x .035/360 x 450 = $218.75 of interest earned.

 

Oh, you used 18 mos and I was using 15 mos. He said it was a 15 month CD. That's why I was confused.