How Does an FD Calculator Work?
A Fixed Deposit (FD) calculator helps you determine the maturity value and interest earned on your deposit. By entering your principal amount, the bank's interest rate, and the duration of your investment, you can instantly see how much wealth your deposit will generate.
The Mathematical Formula
The FD calculator uses the standard compound interest formula, factoring in how often the bank compounds the interest (most banks compound quarterly):
$A = P(1 + \frac{r}{n})^{n \times t}$
- A = Maturity Value (Total Amount)
- P = Principal amount deposited
- r = Annual interest rate (in decimal)
- n = Number of times interest is compounded per year (e.g., 4 for Quarterly)
- t = Number of years the money is invested