Cd Calculator

Step-by-Step Guide to Using the CD Calculator

Introduction

The CD (Certificate of Deposit) Calculator is a helpful tool for determining the future value of a CD investment based on various parameters such as initial deposit, interest rate, term length, and compounding frequency. Follow the guide below to use the calculator effectively.

Step 1: Enter Initial Deposit Amount

1. Find the input field labeled Initial Deposit Amount ($).
2. Enter the amount you wish to deposit in the CD. Note that the minimum deposit amount is $100, and the maximum is $1,000,000.

Step 2: Provide the Annual Percentage Yield (APY)

1. Locate the input field labeled Annual Percentage Yield (APY) %.
2. Enter the APY offered by the CD. This should be a number between 0.01 and 15, with increments of 0.01%.

Step 3: Select the CD Term Length

1. Identify the dropdown labeled CD Term Length.
2. Select the desired term length for your CD from the list of options available such as 3 months, 6 months, 1 year, etc.

Step 4: Choose the Compounding Frequency

1. Look for the dropdown menu labeled Compounding Frequency.
2. Select how often the interest should be compounded (e.g., Daily, Monthly, Quarterly, Semi-annually, Annually).

Step 5: Calculate the Results

1. Once all required fields are filled, initiate the calculation by clicking the relevant button to compute the results.

Understanding the Results

After calculation, the results will be displayed for the following fields:

• Final Balance: The calculated future value of your CD. This value takes into account the initial deposit, APY, term length, and compounding frequency.
• Total Interest Earned: Displays the total interest you will earn over the term of the CD.
• Effective Annual Rate: Shows the effective annual rate of return considering the compounding frequency.

All monetary values are formatted in USD with two decimal places, and the effective annual rate is presented as a percentage with two decimals.