Determine the principal amount
Identify the annual interest rate
Identify the term length
Convert the annual interest rate to a decimal
Convert the term to years if needed
Use the simple interest formula if interest is not compounded: Interest = Principal × Rate × Time
Use the compound interest formula if interest is compounded: Future Value = Principal × (1 + Rate / Compounding Frequency)^(Compounding Frequency × Time)
Subtract the principal from the future value to find earned interest
Calculate the annual percentage yield if needed: APY = (1 + Rate / Compounding Frequency)^(Compounding Frequency) – 1
Account for early withdrawal penalties if applicable
Compare the total return across different CD offers