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question on cd interest

Posted by harveymasons (My Page) on
Sat, Jul 22, 06 at 11:23

How could I figure out the monthly yied(interest on my investment) on say a 9 or 6 month cd that is paying 5.35% a year, Lets say for a 25k investment

Am I correct by doing this: 25,000 x .0535 = 1337.50 1337.50/12= 111.45 a month income???

thx in advance,
harvey


Follow-Up Postings:

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RE: question on cd interest

I think you are right, so if you got a 9-month CD you would multiply $111.45 x 9 (or 6 for 6 months)to find out how much you would make. You could also ask the institution who is offering the CD just to verify your math.


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RE: question on cd interest

I agree with the accounting.

That's before thererosion of income by taxes or of the asset by inflation.

o j


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RE: question on cd interest

It might also be figured on a year-basis, then pro-rated over the number of days for periodic posting.

25,000 X 0.0535 / 365 (or 366 if a leap year, or in some cases 360 if that's the bank's policy) X 30 or 31 days in the month.


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RE: question on cd interest

We also need to know if the 5.35 is the simple interest or the compound interest. That would change things slightly


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