If I have $10,000 and I purchase a 20-day CD with a 3.0% APY, how much money will I have when I withdraw in 20

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If I have $10,000 and I purchase a 20-day CD with a 3.0% APY, how much money will I have when I withdraw in 20

I'm just confused about how Certificates of Deposit work. It doesn't make sense that I'd make $300 in 20 days. I mean, that's better than the stock market!

2007-01-10 02:31:56 · 2 answers · asked by wi_guy 2 in Business & Finance ➔ Personal Finance

2 answers

APY = Annual Percentage Yield

You would get about $16.50 depending on the fees!

You would only get $300 if you kept buying 20 day CD's for the full year!

2007-01-10 02:39:59 · answer #1 · answered by me4tennessee 6 · 0⤊ 0⤋

$10,016.44

I believe that to be a simple interest calculation... ($10,000x.03=$300 ; $300/365=$.8219 ; $.8219x20=$16.4384 ; $10,000+$16.44= $10,016.44)

2007-01-10 02:43:00 · answer #2 · answered by saucerfulofbert 1 · 0⤊ 0⤋