Fixed Deposit Calculation - Tutorial

FD Calculation - Definition, Formula, Example

Definition:

A type of savings given by banks for certain period of time where, customers can get high interst rate for their investment is fixed deposit(FD).

Formula

A = P x (1 + r/n)nt I = A - P Where, A = Maturity Value P = Principal Amount r = Rate of Interest t = Number of Period n = Compounded Interest Frequency I = Interest Earned Amount
Example

Principal amount is 4000, interest rate is 3%, number of period is 10 months and pay frequency is Annually. Find the fixed deposit interest earned and maturity value.

Given

P = 4000 r = 3/100 = 0.03 t = 10 months n = Annually (1)

To find

Interest Earned (I) Maturity Value (A)

Solution

A = P x (1 + r/n)nt A = 4000 x (1 + 0.03/1)1*(10/12) A = 4099.75

I = A - P I = 4099 - 4000 I = 99.75 Interest Earned on FD is 99.75 and maturity value is 4099.75


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