SELECTED ISSUES INVOLVING THE TAX RELIEF ACT OF 1997
A family has a certificate of deposit (CD) in the amount of $5,000 paying interest at 4%. The penalty for early withdrawal is three months of interest. $5,000 x 0.04 = $200 in annual income. $200/12 months = $16.67 interest per month. $16.67 x 3 months = $50.01. $5,000 - $50 = $4,950 cash value of CD ................
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