If I have $ 10,000 in CD MONEY MARKET at a rate 5% for 6 months. What my return should be?

Question

I did the math what I see in my account that doesn't make scene!!! What amount should my return be?

Please help, and thank you

Answer 1

Why do people respond when they do not know what they are talking about. Of the first 4 answers, only one was correct.

$10,000 * 5% = $500 (for a full year)

$500 * 6 months/12 months = $250

Answer 2

Sorry, guys. You are all wrong. The answer is:

US$253.13

Here's why you are all wrong and why the person asking the question is so confused as to the math:

Currently, Certificates of Deposit (CD) rate disclosure is based upon the Truth in Savings Act. This act mandates that the APY (as opposed the APR) is calculated on a daily compounding rate based on a 365 day year (366 in a leap year).

See Appendix A of the act, which is linked via the Federal Reserve through the GPO website.
http://www.federalreserve.gov/regulations/default.htm#dd
It's pretty dry stuff to read this, but the key thing in the regulations is how your rate is calculated.

The calculation is pretty basic:
APY=100 [(1+Interest/Principal)(365/Daysinterm)−1]

If you don't want to do the math, you can use a free calculator at the US' national Office of the Comptroller of Currency at:
http://www.occ.treas.gov/useful.htm#software
(scroll down to the bottom).

Different compounding rules for loans (APR) and deposits (APY) makes it pretty darn hard to figure these things out exactly right - hence the need for the TISA and TILA regulations.

Answer 3

csanda is definately the correct one.

Anything else is straight math calculations and not based on reality of cd's and other investments.

what he is speaking of is what I know of as Future value.

but for me, I dont do cd's for rates less than 8% since most of my investments are 10-15% a year in growth.

Answer 4

$250.

Answer 5

like 500 dollar

Answer 6

Roughly 13,000.00