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Certificate of Deposit Solution

STEP 0: Pre-Calculation Summary
Formula Used
certificate_of_deposit = Initial Deposit Amount*(1+(Annual Nominal Interest Rate/Compounding Periods))^(Compounding Periods*Number of Years)
CD = P0*(1+(r/n))^(n*t)
This formula uses 4 Variables
Variables Used
Initial Deposit Amount- The amount of money required to open a savings or investment account is called Initial Deposit Amount.
Annual Nominal Interest Rate- Annual Nominal Interest Rate is the periodic interest rate multiplied by the number of periods per year.
Compounding Periods- Compounding Periods is the number of times compounding will occur during a period.
Number of Years- The number of years is the total period for which the certificate of deposit is done.
STEP 1: Convert Input(s) to Base Unit
Initial Deposit Amount: 5000 --> No Conversion Required
Annual Nominal Interest Rate: 12 --> No Conversion Required
Compounding Periods: 10 --> No Conversion Required
Number of Years: 25 --> No Conversion Required
STEP 2: Evaluate Formula
Substituting Input Values in Formula
CD = P0*(1+(r/n))^(n*t) --> 5000*(1+(12/10))^(10*25)
Evaluating ... ...
CD = 2.01669494585378E+89
STEP 3: Convert Result to Output's Unit
2.01669494585378E+89 --> No Conversion Required
FINAL ANSWER
2.01669494585378E+89 <-- Certificate of Deposit
(Calculation completed in 00.031 seconds)

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Certificate of Deposit Formula

certificate_of_deposit = Initial Deposit Amount*(1+(Annual Nominal Interest Rate/Compounding Periods))^(Compounding Periods*Number of Years)
CD = P0*(1+(r/n))^(n*t)

What is Certificate of Deposit?

A certificate of deposit (CD) is a product offered by banks and credit unions that provides an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period of time. Regulated by the Reserve Bank of India, it is a type of money market instrument issued against the funds deposited by an investor with a bank in a dematerialized form for a specific period of time. Issued by the Federal Deposit Insurance Corporation (FDIC) and regulated by the Reserve Bank of India, the CD is a promissory note, the interest on which is paid by the bank.

Advantages of Certificate of Deposit

1. Since these are government-backed securities, the investor’s principal amount is kept safe. Hence, it can be said that CDs are a less risky investment option than stocks or bonds. 2. Certificate of Deposit is known to offer a higher rate of interest and better returns in comparison to the traditional savings accounts. 3. Investments in CD grant a grace period of 7 days to the investor to decide whether or not he/she wants to reinvest the matured amount.

How to Calculate Certificate of Deposit?

Certificate of Deposit calculator uses certificate_of_deposit = Initial Deposit Amount*(1+(Annual Nominal Interest Rate/Compounding Periods))^(Compounding Periods*Number of Years) to calculate the Certificate of Deposit, Certificate of Deposit (CD) is a savings certificate with a fixed maturity date, specified fixed interest rate and can be issued in any denomination aside from minimum investment requirements. Certificate of Deposit and is denoted by CD symbol.

How to calculate Certificate of Deposit using this online calculator? To use this online calculator for Certificate of Deposit, enter Initial Deposit Amount (P0), Annual Nominal Interest Rate (r), Compounding Periods (n) and Number of Years (t) and hit the calculate button. Here is how the Certificate of Deposit calculation can be explained with given input values -> 2.017E+89 = 5000*(1+(12/10))^(10*25).

FAQ

What is Certificate of Deposit?
Certificate of Deposit (CD) is a savings certificate with a fixed maturity date, specified fixed interest rate and can be issued in any denomination aside from minimum investment requirements and is represented as CD = P0*(1+(r/n))^(n*t) or certificate_of_deposit = Initial Deposit Amount*(1+(Annual Nominal Interest Rate/Compounding Periods))^(Compounding Periods*Number of Years). The amount of money required to open a savings or investment account is called Initial Deposit Amount, Annual Nominal Interest Rate is the periodic interest rate multiplied by the number of periods per year, Compounding Periods is the number of times compounding will occur during a period and The number of years is the total period for which the certificate of deposit is done.
How to calculate Certificate of Deposit?
Certificate of Deposit (CD) is a savings certificate with a fixed maturity date, specified fixed interest rate and can be issued in any denomination aside from minimum investment requirements is calculated using certificate_of_deposit = Initial Deposit Amount*(1+(Annual Nominal Interest Rate/Compounding Periods))^(Compounding Periods*Number of Years). To calculate Certificate of Deposit, you need Initial Deposit Amount (P0), Annual Nominal Interest Rate (r), Compounding Periods (n) and Number of Years (t). With our tool, you need to enter the respective value for Initial Deposit Amount, Annual Nominal Interest Rate, Compounding Periods and Number of Years and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.
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