Formula for Calculating Fixed Deposit

For simple interest FDs, the formula used by fixed deposit calculators is straightforward:
M=P+(P×r×t100)

Where -

• P = principal amount you initially deposit
• R = annual interest rate
• N = tenure of the deposit in years
   

Let's consider an example where you deposit ₹1,00,000 for 5 years at an interest rate of 10% per annum:
M=₹1,00,000+(1,00,000×10×(5/100))
M=₹1,50,000

For compound interest FDs, the formula is slightly different:
M=P+P((1+i100)t−1)

Where -

• P = principal amount you initially deposit
• R = interest rate per period (usually per annum)
• N = tenure of the deposit in years

Using the same example as before (₹1,00,000 deposited for 5 years at 10% interest), the calculation for compound interest would be:
M=₹1,00,000 × (1 + 0.05/1)^(1×5)
M=₹1,61,051