text: 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? 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!