#### Definition:

Fixed Deposits are a significant mode to invest for those who value security more than returns.
This tutorial explains you how to calculate the maturity value and interest earned from FD.

#### Fomula:

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 :

An amount of Rs.15000 is deposited in a bank for 2 years and paying an annual interest rate of 5%, compounded quarterly.

##### Given :

Principal Amount (P) = Rs.15000
Rate of Interest Amount (r) = 5% = 0.05
Number of Period (t) = 2 years
Compounded Interest (n) = 4 (quarterly)

##### To Find :

Fixed Deposit (FD)

##### Solution :

###### Step 1 :

Maturity Value (A) = P x (1 + r/n)^{nt}
= 15000 x (1 + 0.05/4)^{4x2}
= 15000 x (1 + 0.0125)^{8}
= 15000 x (1.0125)^{8}
= 15000 x 1.104486101
Maturity Value (A) = Rs. 16567.29

###### Step 2 :

Interest Earned Amount (I) = A - P
= 16567.29 - 15000
Interest Earned Amount (I) = Rs. 1567.29

##### Result :

Maturity Value (FD) = Rs. 16567.29
Interest Earned Amount (I) = Rs. 1567.29