## How to use Minicalci’s FD Calculator?

- Enter the principal amount The first step is to enter the amount that you wish to invest as the principal amount. This is the amount that you will be depositing in the FD. For example, let’s say you want to invest Rs. 1,00,000.
- Enter the interest rate The next step is to enter the interest rate offered by the bank or financial institution. This is the rate at which your investment will earn interest. For example, let’s say the interest rate offered is 7.5% per annum.
- Choose the tenure The next step is to select the tenure for which you want to invest in the FD. This is the time period for which you want to keep the money locked in the FD. For example, let’s say you want to invest for 5 years.
- Select the compounding frequency The next step is to select the frequency at which the interest will be compounded. This can be monthly, quarterly, half-yearly or yearly, depending on the policy of the bank or financial institution. For example, let’s select quarterly.
- Click on “Calculate” After entering all the details, click on the “Calculate” button to get the maturity amount. The FD calculator on your website will use the formula
`A = P * (1 + r/n)^(n*t)`

to calculate the maturity amount based on the inputs provided by you. - Check the results The calculator will display the maturity amount along with other details like the interest earned, total amount invested, and the interest rate. You can review these results to get an idea of the returns you can expect on your investment.

### The Formula to Calculate FD maturity amount

Fixed Deposit (FD) is a popular investment option that offers a fixed rate of interest over a specified period. When you invest in an FD, the interest earned is compounded periodically, which means that you earn interest on both the principal amount and the interest earned. The formula used to calculate the maturity amount of an FD is:

```
A = P * (1 + r/n)^(n*t)
```

Where:

- A is the maturity amount
- P is the principal amount
- r is the annual interest rate (as a decimal)
- n is the number of times the interest is compounded per year
- t is the tenure in years

Let’s take an example to understand how this formula works. Suppose preetham invest Rs. 1,00,000 for 5 years at an annual interest rate of 7.5%. The interest is compounded quarterly, i.e., four times a year. Using the formula, we can calculate the maturity amount as follows:

```
A = 100000 * (1 + 0.075/4)^(4*5)
A = 100000 * (1.01875)^20
A = 100000 * 1.44995
A = 144995
```

So, the maturity amount after 5 years would be Rs. 1,44,995.

Now, let’s take a closer look at each element of the formula:

- P: This is the principal amount you invest in the FD. In our example, P is Rs. 1,00,000.
- r: This is the annual interest rate offered by the bank, expressed as a decimal. In our example, r is 0.075 (i.e., 7.5% divided by 100).
- n: This is the number of times the interest is compounded per year. In our example, n is 4 since the interest is compounded quarterly.
- t: This is the tenure of the FD in years. In our example, t is 5 years.

To calculate the maturity amount using the formula, we first need to calculate the quarterly interest rate, which is r/n. In our example, the quarterly interest rate would be 0.075/4 = 0.01875.

We then multiply the quarterly interest rate by the number of quarters in the tenure (n*t) to get the exponent (n*t). In our example, the exponent would be 20 since there are 4 quarters in a year and the tenure is 5 years.

Finally, we plug in the values of P, r/n, and (n*t) into the formula and calculate the maturity amount. In our example, the calculation would be:

```
A = 100000 * (1 + 0.075/4)^(4*5)
A = 100000 * (1.01875)^20
A = 100000 * 1.44995
A = 144995
```

Therefore, the maturity amount after 5 years would be Rs. 1,44,995.

In conclusion, the formula for calculating the maturity amount of an FD is simple but powerful. By using the formula `A = P * (1 + r/n)^(n*t)`

, you can calculate the maturity amount of your investment with ease. It takes into account the principal amount, interest rate, tenure, and compounding frequency to determine the maturity amount of your investment. This information can help you make an informed decision about your investment and plan your finances accordingly.