Elle Navorski wrote:
- quote -

Well, that makes no sense whatsoever. Even if they made the simplistic
error of taking $10,000 * 4.5% APR / 12 mos = $37.50. That is still
considerably below $41.05.

You should ask them how they came up with that value. Maybe you two
were looking at two different CDs. Maybe their 5 year CD rate increased
but didn't update it on their website or something.

Rich, my formula is the one you used and also

$10,000 [(1 + 0.0441/365)^30 - 1] = $36.31

The bank twice said I'd make $41.05 (plus or minus a penny or so depending
on the month). Despite my insistence that I was not reinvesting interest
and only wanted the first month's interest, anyway.

I believe you. Thanks much. Now I can properly compare the yield on CDs to
my stocks and bonds, as I noted in my first post and as Elizabeth pointed
out as appropriate a second time.

"Elle Navorski" <elle_navorski[at]nospam.earthlink.net> wrote in message
news:WOBEd.3510$Ii4.1039[at]newsread3.news.pas.earthlink.net...
- quote -

So why are you complaining?

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://www.brentdgardner.com/
http://www.gardnerfinancialgroup.com/
http://www.topgunproducers.com/

Si vis pacem para bellum!

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

"Elle Navorski" <elle_navorski[at]nospam.earthlink.net> writes:

- quote -

$36.75

Reasoning:
(1 + 0.0441/12)^12 = 1.04500

This means that the interest is being compounded monthly,
and that the monthly rate is 4.41%/12 = 0.3675%.

So the first month's interest (which will be *every month's
interest, if the interest is withdrawn monthly) will be $36.75.

- quote -

What's your formula?

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

I am having a hard time getting an answer that makes sense to me from my
bank about the monthly income from a potential CD investment.

If the bank says it is paying an "interest rate of 4.41%, with an annual
percentage yield of 4.50%" on a fixed rate, five-year CD, then how much
interest will I make the first month on a $10,000 investment?

I have a formula but it yields numbers that are a lot lower than what the
bank insists I'll be paid each month. I've asked two representatives about
this and get the same answer. The last time I spoke to one of their reps I
was emphatic with that I was not going to reinvest...

I need this so I can compare the yield from this investment to the yield
from stock dividends and corporate bonds.

TIA