1. What is the American Savings Bank CD Calculator?

The American Savings Bank CD Calculator helps investors calculate the maturity amount of Certificate of Deposit investments using the compound interest formula. It provides an accurate projection of investment growth over time.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

Where:

• \( P \) — Principal amount (USD)
• \( R \) — Annual interest rate (decimal)
• \( n \) — Compounding frequency per year
• \( T \) — Time period in years
• \( A \) — Maturity amount (USD)

Explanation: The formula calculates how much your initial investment will grow based on the interest rate, compounding frequency, and time period.

3. Importance of CD Investment Calculation

Details: Accurate CD maturity calculation is crucial for financial planning, investment comparison, and understanding the potential returns from fixed-income investments.

4. Using the Calculator

Tips: Enter principal amount in USD, annual interest rate as a decimal (e.g., 0.05 for 5%), compounding frequency per year, and time period in years. All values must be positive.

5. Frequently Asked Questions (FAQ)

Q1: What is compound interest?
A: Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods.

Q2: How does compounding frequency affect returns?
A: More frequent compounding (daily, monthly, quarterly) results in higher returns compared to annual compounding at the same rate.

Q3: What are typical CD terms at American Savings Bank?
A: CD terms typically range from 3 months to 5 years, with varying interest rates based on term length and deposit amount.

Q4: Are CD investments FDIC insured?
A: Yes, CDs offered by American Savings Bank are FDIC insured up to the maximum allowed by law.

Q5: Can I withdraw money from a CD before maturity?
A: Early withdrawals from CDs typically incur penalties, which may reduce your principal and earned interest.