FD Calculator: If you make an FD of Rs 1 lakh for five years at 10% per annum simple interest, then what will be your total maturity amount according to the formula?
FD Calculator: Fixed Deposit is a safe and fixed return option of investment. If you make an FD (5 years FD) for five years, then it is important to understand the return on maturity. According to the Groww app, FDs can be of two types. One which you get done at simple interest and the other at compound interest rate. If we talk about returns, then the difference between the returns of these two can be understood. We try to understand here the calculation of returns at the time of maturity on FDs of Rs 1 lakh for five years.
Simple Interest Calculation
According to Grow.in, there is a formula to calculate the maturity amount on FD on simple interest – M = P + (Px rxt/100. For your information, let us tell you, in this, M means maturity amount, P. Means principal amount i.e. what you deposited. r means interest rate per annum. t means tenure of FD. Now for example if you make FD of Rs 1 lakh for five years at 10% per annum simple interest then According to the formula, your total maturity amount comes to Rs 1,50,000.
Calculation on Compound Interest
If you make an FD of the same amount on compound interest i.e. compound interest fd calculation, then there is a different formula for this: M = P + P{(1+i/100)t-1}. In this, M means maturity amount, P means the principal amount which you deposited. i means interest rate per tenor and t means tenure of FD. Now according to this, when the FD calculation is done, then the total maturity amount is Rs 1,61,051. That is, there is a difference of Rs 11,051 in the return on the same investment amount.
Many banks have increased the interest rate on FD
Banks, NBFCs and other financial institutions have continuously increased interest rates on fixed deposits after the RBI increased the repo rate for some time. Experts say that FD Calculation for investors as compared to earlier Now is the right time to do it. Both government and private banks have offered higher interest rates to the customers.
