Question

Haylie's $5000 CD is nearing its maturity and will have a maturity value of $6101.89. The renewal rate for her CD will be at a historic low and will lock up her money for another 5 years. Haylie feels she can earn higher rates by exploring different savings accounts. Which option should Haylie choose for her CD?

A. Reinvestment
B. Withdrawal
C. Automatic renewal
D. Termination
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Answer 1

D

Answer 2

If Haylie reinvests the money back into the same CD, it will lock it up for another 5 years, similarly for auto renewal. Not a good choice knowing that the interest rates are going to be lower. If Haylie withdrew the money and invests it into something else like stocks, then Haylie has the potential to ear higher earnings. However, terminating the investment won't do Haylie any good since terminating means that the money will not be invested somewhere else. Terminating is like putting your money under your mattress.

Answer 3

*earn