Perhaps you chose Bronx First National, because of the higher ending balance, but...
Uh-oh! The college (name of your college here: 5pts. requires the first tuition payment to secure enrollment 6 months before the CD matures.
Now you must withdraw the money from the CD early (after only 3 years and 6 months) and you face two penalties...
Penalty 1: The interest rate for the last year is reduced to 0.5% APR Simple interest.
Penalty 2: Then there is an additional $250 penalty fee deducted from your account.
d. Find the ending balance at 1.4% interest for the first 3 years only. (Use NerdWallet Calculator)
B=
P=
r=
n=
t=
e. Using the ending balance (answer d.) as your new principal, find the simple interest (I) earned for the last 6 months at 0.5% APR. (Show work.)
I=
P=
r=
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f. Now subtract the 250 penalty fee from the ending balance. (answer d.+e) and determine your new ending balance adjusted for both penalties. (Show work.)
g. Why might you have been better off with the Co-op City Bank CD? Explain comparing data (from answers a. and f.)
