MoneyMakerGroup Forum > Why Are Interest Rates On Cd's Not Mathematically Correct?

Full Version: Why Are Interest Rates On Cd's Not Mathematically Correct?

MoneyMakerGroup Forum > MoneyMaking: Markets, Real Estate, Banking, and Investments > Personal Finance > Banking, Savings, CD’s, Money Markets, Bonds & Retirement Planning

investotron

Mar 22 2008, 04:58 PM

I'm getting ready to start investing and I was thinking about getting some CD's. I went to bankrate.com and was looking at 1 month CD's interest rates. I started using their calculator and realized that math doesn't seem to work in the world of investing.

If I invest $1,000.00 in a 1 month CD that offers a %2.75 interest rate compounded daily I will only make $2.29?
How is the even logical?

$1,000.00 x .0275 = $27.50

Please explain.

I can make $2.29 a month by picking up change from underneath the couch.

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