Home
Back
Interest Formula:
| From: | To: |
The interest calculation for fixed deposit determines the earnings on an investment by subtracting the principal amount from the maturity amount. This simple formula helps investors understand their returns on fixed deposit investments.
The calculator uses the interest formula:
Where:
Explanation: The formula calculates the difference between the final amount received at maturity and the original investment to determine the interest earned.
Details: Calculating interest earned on fixed deposits helps investors evaluate investment performance, compare different investment options, and plan their financial goals effectively.
Tips: Enter the maturity amount and principal amount in currency units. Both values must be positive numbers, and the maturity amount should be greater than or equal to the principal amount.
Q1: What is a fixed deposit?
A: A fixed deposit is a financial instrument where you invest a lump sum amount for a fixed period at a predetermined interest rate.
Q2: Does this calculator account for compound interest?
A: No, this calculator uses a simple formula (I = A - P) that works with the final maturity amount regardless of how the interest was compounded.
Q3: Can I use this for different currencies?
A: Yes, the calculator works with any currency as long as you maintain consistency in the currency units for both inputs.
Q4: What if the maturity amount is less than the principal?
A: This would indicate a loss rather than interest earned. The calculator requires the maturity amount to be at least equal to the principal.
Q5: Are there any limitations to this calculation?
A: This simple calculation doesn't account for factors like taxes, inflation, or varying interest rates during the investment period.