Certificates of deposit usually attract interest rates higher than those on savings accounts. Longer-term deposits attract even higher rates, as do deposits of higher amounts. In a compounding CD, interest on the certificate adds to the deposit, and you thereafter receive interest on that interest as well as the deposit's original principal. A CD that pays quarterly pays interest four times a year at a rate proportionately less than the annual interest rate.

Multiply the number of years until the deposit matures by 4. For example, if you have invested in a five-year CD, multiply 5 by 4 to get 20, the number of quarters until the CD matures.

Divide the CD's annual interest rate by 400. For example, if the deposit offers 4.2 percent interest annually, divide 4.2 by 400 to get 0.0105.

Add 1 to the result, to get 1.0105.

Raise this sum to the power of the number of quarters until the CD matures. Continuing the example, raise 1.0105 to the power of 20 to get 1.2323.

Subtract 1 from the result, to get 0.2323.

Multiply this factor by the deposit's principal. For example, if you put $10,000 into the deposit, multiply 0.2323 by $10,000 to get $2,323. This is the CD's accrued interest at maturity.

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