Hello,

I am looking into investing in a CD.
Say that I will invest $1,000 into a 5.1% CD for 15 months that is compounded monthly.

Can anyone explain how I can figure out my profits? would I make $51 every month for 15 months, or is it only $51 total? My parents are telling me 2 completely different things and I need some outside information.

Any help would be greatly appreciated.

Thanks!

$51. but since it's compounded monthly it will be a little more than that. about $70 or so total over 15 months.

I dont think it would be smart to put $1k in a CD. Tying up $1,000 for 1.25 years for just $70 is counter productive. Try paypal or a money market account. It will keep your money liquid in case you ever need it for anything.

you can use this formula to calculate your profit using a yearly interest (in this case: 5.1%)

http://en.wikipedia.org/wiki/APY

or if you prefer the automatic,
5.1% for a CD is a yearly interest, since you've told me that it's compounding monthly, then your monthly interest would be (5.1% / 12) = 0.425%

you can use a free compound interest calculator like in http://www.u-software.com/ (free HYIP calculator) or any other tipe of compound calculator.
download it, and use it.
BTW, your $1000 will become $1065.68 after 15 month

hope this help

Personally, it would not be a good choice to put this money into CD if you are looking to grow your money. It is just not sensible financially.

Or would you rather see a much higher return?