Fixed long-term bonds and savings accounts? If I deposit a¬ 100 in a fixed-term obligation to a 5.30% AER how will it be worth after 5 years
Bonds involve risk.
If the company goes under - you're screwed.
Look ILC.
Consider one year at 4 cd at 4% interest - yes, they still exist.
Google for your answer:
Savings Account calculator
There is a piece of the puzzle missing. The interest is calculated:
annually, monthly or quarterly
An answer can be given without this information.
If this is homework - Click on each year when you find your online calculator.
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If this is the simple interest formula is the basis of time * * rate.
100 * .053 * 5 = 126.50.
You did not say if it is a government bond or corporate bond. If it is a corporate bond, and want to sell on the secondary market, then you may be able to sell it for more or less than 100 euros depending on prevailing interest rates at this time.
Posted on February 12, 2010.
