0
$\begingroup$

Suppose you buy a CD for $1000 that earns 2.5% APR and is compounded quarterly. The CD matures in 5 years. Assume that if funds are withdrawn before the CD matures, the early withdrawal fee is 3 months' interest. What is the early withdrawal fee on this account?

  1. \$1.25
  2. \$3.75
  3. \$3.13
  4. \$6.25
  • 1
    Please avoid titles in full caps, also try to make your titles hint on the content of the post.2012-12-18
  • 0
    Wouldn't the amount depend on when the early withdrawal occurred? (One of the choices gives the smallest possible value it could be.)2012-12-18

1 Answers 1