Marcus CD Calculator Interest Rate Calculator by Month

Marcus CD Growth Formula:

\[ A = P \times (1 + \frac{r}{12})^{(12 \times t)} \]

Final Amount (A):

Total Interest Earned:

1. What is the Marcus CD Calculator?

The Marcus CD Calculator helps you estimate the growth of your Certificate of Deposit (CD) investment with monthly compounding interest. It uses the standard compound interest formula adjusted for monthly compounding periods.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

\[ A = P \times (1 + \frac{r}{12})^{(12 \times t)} \]

Where:

$ A $ — Final amount including principal and interest
$ P $ — Principal investment amount
$ r $ — Annual interest rate (in decimal form)
$ t $ — Time the money is invested for (in years)

Explanation: The formula accounts for monthly compounding by dividing the annual rate by 12 and multiplying the time period by 12 compounding periods per year.

3. Understanding CD Growth

Details: CDs offer guaranteed returns with fixed interest rates. Monthly compounding means interest is calculated on both the initial principal and the accumulated interest from previous periods.

4. Using the Calculator

Tips: Enter your initial deposit amount, the CD's annual percentage yield (APY), and the term length in years. The calculator will show your final balance and total interest earned.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between APR and APY?
A: APR is the annual rate without compounding, while APY includes the effects of compounding. Marcus CDs use APY.

Q2: Are there penalties for early withdrawal?
A: Yes, Marcus CDs typically charge a penalty for early withdrawal before the term ends.

Q3: How often is interest paid?
A: Marcus CDs typically compound interest monthly and pay it at maturity, unless you choose a CD with different terms.

Q4: Are CD interest rates fixed?
A: Yes, Marcus CD rates are fixed for the entire term once you open the account.

Q5: Is there a minimum deposit for Marcus CDs?
A: Marcus typically requires a minimum deposit of $500 for CDs.