saving cd account question

[lgame]

trying to calculate how much i would have at the end of cd term but dont know if im doing the math correctly..(ex...)-if the deposit amount to open the cd account was $5000 for a 5 month term and we didnt deposit any extra money after and the apy was 2.55%...how much money would we have total after the 5 month term?

[talkgold]

About $5053.00 give or take a dollar or two

[lgame]

how did u figure that out?

[talkgold]

.0255 / (5/12) * 5000 - Not exact since this does not take in compounding.

[lgame]

outta curiousity y did u use .0255 instead of 2.55?

[GoIllini]

Originally Posted by lgame

trying to calculate how much i would have at the end of cd term but dont know if im doing the math correctly..(ex...)-if the deposit amount to open the cd account was $5000 for a 5 month term and we didnt deposit any extra money after and the apy was 2.55%...how much money would we have total after the 5 month term?

I note that you use APY instead of APR. Is there a reason for this? Let's assume monthly compounding using a 30/360 daycount convention:

Monthly interest rate= (1+2.55/100)^(1/12)-1=0.210463%
Interest rate for five months=1.00210463^5=1.056755%

Total amount in your account after five months, with 2.55% interest, assuming monthly compounding:
5052.84

Are you locked into this CD? There's several FDIC insured banks out there that have savings accounts with yields over 3% (USD deposits). On a site like this, I'm going to encourage due-diligence, so I would recommend googling the following financial institutions:

HSBC Direct (3.25%)
WaMu (4.00%)


Also, WaMu is offering a 5% 12 month CD. You shouldn't have to put up with 2.55% interest anywhere right now. Shoot for 4% or better- just make sure it's FDIC-insured.