What is my annual rate of return on the following investment?

i have a 1-month CD initially set up with $1000 with a guaranteed monthly return of 2%.

after 12-months of rolling it over into 1-month CD's after maturity (while at the same time contributing $500 monthly during those timeframes), what will my final CD be worth after the maturity of month #11?

assuming the interest rate does not change during the 12-months and remains 2% for the duration of this scenario.

in addition, what is the overall rate of return? 2%, 24% (2% x 12-months), or some totally other figure?

1 month CD deposit of $1,000 @ 2% per month is $20 per month.

that's around $240 of interest per year @ 2% on $1,000

if you put in 500 per month for one year that's $6,000.

$1240 + 6,000 = $7,240

2% per month of that $7,240 is about $144.80

So, after 11 months of interest that's an additional $1,592.80

In total you could potentially have around...$8,832.80

After 11 months including interest and making $500 deposits on that initial $1,000 deposit.

It's only ever going to be 2% per month... but it's a 24% increase over one year on your investment.

You'll have 24% more money in your account at the end of the year if you don't do anything at all.

this person forgot the effect of compound interest. So, the numbers are completely off. Report It

Are you sure its earning 2% interest a month, or that's the APY? I never heard of any investment giving 2% a month. That would mean, each year, your CD earns 24% interest.

Assuming you do earn 2% interest/month and put $500 into it each month:
By the end of month 11, your CD is worth: $6827.73
End of month 12, your CD is worth: $7474.29

Though, I still don't believe your CD is earning 2%/month.

You must be getting 2% annualized - not per month - if in US. Means you will make slightly over 2% if compounded monthly or a lousy $22 or so. Horrible return & do not even think of adding more money to it. Losing money big time after taxes & inflation. Get a mutual fund & at least have a chance to succeed. vegas_iwish@yahoo.com

Are you solving problem for school homework or real case? No one pay 24% interest in US.