Question: If I put $1,000 on a 6-month CD that yields 5%, how much will I take out at the end of 6 months? Is it 5% of $1,000, or 5% of $1,000 each month for 6 months?

Answer: The 5% is an annual interest rate. Your yield depends a bit on how often the interest is compounded. If it is compounded monthly, then each month you will earn 5/12%  or about .42% interest on the combined principal and accrued balance. Your balance at the end of the six months will be 1000*(1.42)^6 = $1025.26. You have earned a whopping $25.26!
This question from the Yahoo Q&A forum is categorized in the topic: Health