Was My Interest Calculated Correctly?

willy12 | Mar 18, 2019 | 143 posts since 2019

It probably was but I wanted to ask.

$150k at 5 per cent in a 7 month CD. (matured yesterday)

I figured it would be $625 per month times 7 months. Which is $4375.

The credit union figured $4,312.60.

Is that correct or are they cheating me out of $62.40?

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Answers

MidAtlantic | Mar 18, 2019 | 142 posts since 2012

It is probably based on the number of days you held the CD. Without knowing which 7 months you held it, it is impossible to check.

willy12 | Mar 18, 2019 | 143 posts since 2019

It matured yesterday.

Blade | Mar 18, 2019 | 49 posts since 2018

They probably accrued your interest daily and February only had 28 days during your 7 month term. That's an overly simplistic explanation but most likely what occurred.

AnnO | Mar 18, 2019 | 129 posts since 2018

I assume this is regarding Keesler. https://www.depositaccounts.com/banks/keesler-cu.html

$150k at 5% for 12 months would be $7500 interest. Divided by 365 days in a year would be about $20.55 a day of interest. Aug 17, 2018 to Mar 17, 2019 would be 7 months containing a total of 212 days. (This does consider differing month lengths.) $20.55 x 212 = about $4356, doing it this way. So your $4375 is a bit too high, but $4312 still seems a bit low. Doing a full daily-compounding amortization might yield different results.

CraigPD | Mar 19, 2019 | 98 posts since 2010

@ 5.00% APY / 4.8793% APR they overpaid by $1.04.

https://docs.google.com/spreadsheets/d/1eMsbTixydYKll6qm3-c0VVnhhH6jZNpJFJ4483t14Vg/edit?usp=sharing

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