Supposing I buy a $3000 cd for 60 months at 4.37%. Will that mean I make 131.1 per month for the 60 months or 131.1 all together?? Or am I just all wrong??
2007-02-21 10:37:55 · 2 answers · asked by Paul 1 in Business & Finance ➔ Investing
$3000 X 4.37% = $131.11. If compounded & paid monthly, divided by 12 months per year = $10.925 added to the $3000 at the end of the first month. Then for the 2nd month $3010.925 X 4.37% = 131.58 /12 = $10.96 added to the 3010.925 = $3,021.88 as a base for the third month ....and so on, and so on. Anyone know if there is a math formular to figure this out or does one need a financial calculator?
2007-02-21 11:53:12 · answer #1 · answered by gosh137 6 · 0⤊ 0⤋
Interest on a CD is compounded and paid monthly. The 4.37% rate is the ANNUAL rate, meaning you would make that each year.
2007-02-21 10:45:11 · answer #2 · answered by LongArm 3 · 0⤊ 0⤋