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Jo wants to put some money in a 15th month certificate of deposit accounts that pay 5 percent annual interest He wants the account to earn 200 in interest. How much money should he put in the account?
Hellokitty22225555
Amount to Deposit (P) = ?
Time (N) = 15 months or 1.25 years
Rate of Interest (R) = 5
Interest Earned = 200
Formula for Interest = P * N * R / 100
Rearranging the formula we get:
P = Interest * 100 / N * R
= (200 * 100) / 1.25 * 5
= 20000 / 6.25
= 3200
If they want to earn 200 interest they must deposit 3200 as the amount for the certificate of deposit.
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∙ 13y ago
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What is a certificate of deposit interest rate?
A certificate of deposit interest rate or CD is a time deposit, a financial product commonly sold in the United States by banks, thrift institutions and credit unions. CDs are similar to savings accounts.
What is one disadvantage of having money in certificate of deposit versus a savings account?
It earns a far higher rate of interest than your savings account. the rate of interest on CD's range from 6% to 10% depending on the duration but the interest on savings accounts is only 3 - 4 %
What is meant in by term deposits in banking?
The meaning of a Term Deposit in banking is referring to a savings account or a certificate of deposit. This particular savings account or certificate of deposit pays at a fixed rate of interest until given a maturity date.
Which is a type of savings account that is designed to accrue interest for a specific period of time?
certificate of deposit
What are the benefits of a certificate of deposit?
One of the benefits of a certificate of deposit is that you get a high interest rate then if you had a savings account. They are also FDIC insured so if the bank goes under your money is safe.
What is the difference between a savings account and a certificate of deposit?
In a regular savings account, the funds are always available for withdrawl. As a result, savings accounts generally have a low rate of interest. A certificate of deposit is an investment for a specific amount of time. The funds are not available until the certificate has matured, therefore, it has a slightly higher rate of interest than a savings account.
What is a certificate of deposit interest rate?
A certificate of deposit interest rate or CD is a time deposit, a financial product commonly sold in the United States by banks, thrift institutions and credit unions. CDs are similar to savings accounts.
Where can one obtain a certificate of deposit interest?
One can receive a certificate of deposit interest from their bank. They could also log on to their digital banking account and find out that way it's easy.
What is a certificate of deposit?
When you put money in a savings account, you can draw it out at any time. In a certificate of deposit, you agree to leave it in the bank for a certain period of time. They pay slightly higher interest because they know that money will be there for 3 months, 6 months, 1 year, etc. If you draw it out early, they reduce your interest.
What is one disadvantage of having money in certificate of deposit versus a savings account?
It earns a far higher rate of interest than your savings account. the rate of interest on CD's range from 6% to 10% depending on the duration but the interest on savings accounts is only 3 - 4 %
What is meant in by term deposits in banking?
The meaning of a Term Deposit in banking is referring to a savings account or a certificate of deposit. This particular savings account or certificate of deposit pays at a fixed rate of interest until given a maturity date.
What is the purpose of a business deposit account?
Business deposit accounts are also known as business savings account where one can deposit an amount of money as savings for one's business. Most savings accounts will also offer interest rates.
Which of these is a type of savings account that is designed to accrue interest for a specific period of time?
certificate of deposit
Which is a type of savings account that is designed to accrue interest for a specific period of time?
certificate of deposit
What the the advantages and disadvantages of a certificate of deposit?
Certificates of deposit are a good idea because they are a high interest deposit and offer a higher interest rate than a savings account and treasury bills and notes.
What are the benefits of a certificate of deposit?
One of the benefits of a certificate of deposit is that you get a high interest rate then if you had a savings account. They are also FDIC insured so if the bank goes under your money is safe.
Why the saving account pay lower interest and the certificate of deposit is higher interest?
Banks make money by lending loans out of the money we deposit with them. In case of a regular savings account, you can withdraw your money anytime you want. So the bank cannot effectively use this money to make profits themselves. Hence the rate of interest paid on these accounts is very low. But, in case of a Certificate of Deposit the bank knows that you will not withdraw the money until the stipulated deposit period, so they can effectively utilize this money to make a profit and therefore share a percentage of the same by means of a higher interest rate.
