the_paulr (the_paulr) wrote in personal_roi,

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I have a stupid question

Let's say there are two CD's, both with a rate of 3% APY. One is a 6-month CD, the other is a 12-month CD. (I chose this APY for easy calculations.)

So, if you open a 6-month one but don't let it roll over you only get 1.5% of the APY, right? But if you let it roll over, at the end of a year you've earned interest not only on the principle but also on the interest you earned at 6-months.

Does this assumption make sense?
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