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Unformatted text preview: with a 2% interest rate that this is a better idea. The only concern I know with CD accounsts is that you may be penalized if you draw you money out before the term is up. But with a savings account normally there is no penalty for drawing out any money at anytime. So here is the calculation for the account with the 2% interest rate $26,000*e 0.02*5 = $132,626.174 total To get the interest $132,626.174-$26,000=$106,626.174 Difference from 4.5% and 2% over a five year period $109,983.622-$106,626.174=$3,357.448 So overall it is a better decision to go with the CD account and earn more money on your money. I would definitely go with the CD account because I am about my money. If I can make more money on my money then we have a good day at hand....
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- Spring '11
- Interest Rate, Calculation, Savings account, TUI UNIVERSITY, accounsts