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# The highest interest rate for a 2 year CD(APY) with a 5,000

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## Allison Fitzhugh

on 6 March 2014

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#### Transcript of The highest interest rate for a 2 year CD(APY) with a 5,000

The highest interest rate for a 2 year CD(APY) with a 5,000 dollar deposit is 1.15 percent yearly by Hudson City Saving's.
The highest interest rate for a 5 year CD(APY) with a 5,000 dollar deposit is 2.05 percent yearly.

The function for 2 years would be- f(x)=5,000(1.15)^2
~in two years you would have \$6,612.50.

The function for 5 years would be- f(x)=5,000(2.05)^5
~In five years you would have \$21,012.50.
This is the function format if you were to add on an additional \$50.00 every single year.
F(x)=5,000(rate)^x +50^x
So to figure out how much we will have for each year, we need to substitute into the function.
At the end of the first year for the 2 year CD you would have \$5,625.00. In the second year you would have \$5,850.00.
In year three you would have \$5,9000.
Fourth year: \$5,950.00.
Year five:\$6,000.00.

At the end of the first year for the 5 year CD you would have \$10,300.00.
In the second year you would have \$10,350.00.
Third year: \$10,400.00.
Year four: \$10,450.00.
Year five: \$10,500.00.

This is a linear function because you multiply the 50 by the number of years and the CD's are exponential because you multiply by the exponent.
The average rate of change between years two and three for the 5 year Cd is 50. The average rate of change for years three and five is also 50. This shows that the the value of these is not increasing but it's remaining the same over the two year period.
If I were to use the function k(x)=5,000(1.02)^x the 1.02, x would represent the interest rate per year.
Using this interest rate verses my original interest rate makes no difference to my rate of change. In fact, it stayed the same for both when I worked it out.
I would personally recommend investing in a Certified Deposit(CD) because even if you don't get your money until the CD had matured you would still be gaining money. By the time your CD had matured plus your interest rate you would have a decent profit.

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