Certificates of Deposit

Archive for March, 2008

Question: ONLY 4 Q help immediately as fast as possible!!10 points and best answer for who gets it correct!!!!!?

1) The formula for converting degrees Fahrenheit (F) to degrees Celsius (C) is C = 5/9 (F – 32). Find C for F = 5°.

A)-49
B)-27
C)3
D)-15

2)Jordan invested $1000 in a savings account. The interest rate is 6% per year. Find the simple interest earned in 4 years. Then find the total of principal plus interest

A) $24,000.00; $25,000.00
B) $60.00; $1,060.00
C)$262.48; $1,262.48
D) $240.00; $1,240.00

3)Abbi invested $1,500 in a certificate of deposit with a simple interest rate of 4%. Find the interest earned in 6 years. Then find the total of principal plus interest. (2 points)
A)$36,000.00; $37,500.00
B)$360.00; $1,860.00
C)$397.98; $1,897.98
D)$60.00; $1,560.00

4)You deposit $400 in an account that earns 6% compounded annually (once per year). What is the balance in your account after 5 years? Round your answer to the nearest cent.
A)$535.29
B)$2,120.00
C) $520.00
D) $693.56

Answer: D
D
B
A

Federal Deposit Insurance Corporation

Question: Effective annual yield finance homework problem?

Is this how you would solve this problem:
“You invest in a CD (certificate of deposit) that pays 5.75% compounded quarterly for 6 years. What is the effective annual yield of the CD? What is the overall return after 6 years?”

Answer: What do you mean by the overall return after 6 years?

Let i = effective annual yield. Then

(1+.0575/4)^(4*6)=(1+i)^6
(1+.0575/4)^24 = (1+i)^6
(1+.0575/4)^4 = 1+i
i = (1+.0575/4)^4 – 1 = .0588, or 5.88%

You’d enter the last calculation in your calculator exactly as I typed it. ^ is for exponents.