CD Calculator

Principal Amount:

Annual Interest Rate (%):

Number of Years:

Interest Compounding:

A Certificate of Deposit (CD) is a financial product that is offered by banks and credit unions. It is a type of savings account that pays a fixed interest rate for a fixed period of time. The interest rate is usually higher than that of a regular savings account, and the longer the term of the CD, the higher the interest rate. A CD Calculator is a tool that helps you calculate the interest earned on your CD investment.

Concepts

A CD Calculator uses the following concepts to calculate the interest earned on your CD investment:

Principal

The principal is the amount of money you invest in the CD.

Interest Rate

The interest rate is the percentage of the principal that you earn as interest over the term of the CD.

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Education Quiz

Test your knowledge about topics related to education

1 / 10

What is the study of languages called?

Etymology

Grammar

Linguistics

Syntax

2 / 10

What is the main purpose of a liberal arts education?

To prepare students for specific careers

To provide a broad-based education that cultivates critical thinking and problem-solving skills

To train students in a specific field

To develop students' technical skills

3 / 10

When should a teacher and a pupil hold a case conference?

Whenever the need arises

Before the start of the school year

At the end of the semester

At the close of the day’s work

4 / 10

GPA is considered important as it is required for taking admission into the Bachelor's and Master's degree programme. State true or false.

True

False

5 / 10

Who is known as the father of modern science?

Isaac Newton

Galileo Galilei

Charles Darwin

Albert Einstein

6 / 10

What is the main difference between a public and a private university?

Location

Funding

Size

Degree programs offered

7 / 10

What is GPA used for?

To make special deserts.

To keep track of students' overall performance.

As a study guide for tests.

All of the above

8 / 10

Who invented the printing press?

Johannes Gutenberg

William Caxton

Nicolas Jenson

Aldus Manutius

9 / 10

What is the study of the physical, social, and cultural phenomena of a particular country or region called?

Sociology

Geography

Linguistics

Economics

10 / 10

What is the study of history called?

Historiography

Archival science

Heritage studies

Historical geography

Your score is

Term

The term is the length of time for which you invest in the CD.

Compounding Frequency

Compounding frequency refers to how often interest is added to your investment. The more frequently interest is compounded, the more interest you will earn.

Annual Percentage Yield (APY)

The APY is the effective annual rate of return taking into account the effect of compounding interest.

Formulae

The formula for calculating the interest earned on a CD investment is:

Interest Earned = Principal * (1 + (Interest Rate / Compounding Frequency)) ^ (Compounding Frequency * Term) - Principal

The formula for calculating the APY is:

APY = (1 + (Interest Rate / Compounding Frequency)) ^ Compounding Frequency - 1

Benefits

Here are some benefits of using a CD Calculator:

Accuracy: A CD Calculator helps you calculate your earnings accurately, taking into account compounding frequency and term.
Comparison: A CD Calculator helps you compare different CDs and their respective earnings.
Planning: A CD Calculator helps you plan your investments by showing you how much you can earn over different terms and compounding frequencies.

Interesting Facts

Here are some interesting facts about CDs:

CDs are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor per bank.
CDs are considered low-risk investments because they are insured and offer a fixed rate of return.
CDs can have terms ranging from a few months to several years.

Use Cases

Here are some use cases for a CD Calculator:

Investment Planning: A CD Calculator can help you plan your investments by showing you how much you can earn over different terms and compounding frequencies.
Comparison Shopping: A CD Calculator can help you compare different CDs and their respective earnings.
Budgeting: A CD Calculator can help you budget your finances by showing you how much money you will have at the end of your investment term.

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Emma Smith

Emma Smith holds an MA degree in English from Irvine Valley College. She has been a Journalist since 2002, writing articles on the English language, Sports, and Law. Read more about me on her bio page.