A CD rate calculator is used to determine how much interest a specific CD has incurred in dollar amount or how much it will acquire in its term. There are a few factors that will need to be calculated in order to get the correct result. The first factor in properly calculating a CD rate is the amount of money deposited into the CD account. Then the interest rate and terms need to be determined. For example, if the term is 6 months and the interest rate is 2.2% daily compounded the money placed in the account under the terms is $1,000. This would give you at the end of the 6 month term a total dollar amount of $1,011.
The initial deposit is the amount of money that was first placed into the CD account. The term or months is the time that the money will be in the CD account accumulating the percentage of interest. The interest rate is the amount agreed in percentage that will be paid on the dollar amount that has been placed into the account. Compounding interest is the interest that the CD’s interest has made.
The CD rate calculator is a effective tool that can help you in determining exactly the length of time in which you would like your money to be in the CD account through the bank. It is a wonderful way for you to be able to on your own determine exactly what you want to do, before you ever even go into the bank to set up the CD account.