Question

Caitlin's $5000 CD is nearing its maturity and will have a maturity value of $6101.89. The renewal rate for her CD will be lower than the current one, but still 0.5% higher than her savings account. Caitlin will not need her money for another 5 years, when she plans on buying a house. Which option should Caitlin choose for her CD? A. Withdrawal B. Termination C. Automatic renewal D. Reinvestment

Answer 1

Automatic Renewal

Explanation:

a.p.e.x

Answer 2

As Caitlin will not want the money for the next 5 years, she must opt for the automatic renewal option.

This option will keep her free mind as it will automatically renew the CD and will again start for the intended time period.

Withdrawal cannot be the option as its stated she does not need the money now. Termination cannot be the answer as it will stop the CD and she will get the matured amount only.