The formula used to calculate the future value of a Certificate of Deposit (CD) is:
A = P (1 + r/n)^(n*t)
Here’s a breakdown of the variables:
A: This represents the future value of your CD, including both the initial deposit and the interest earned.
P: This stands for your principal deposit, which is the initial amount of money you invest in the CD.
r: This represents the annual interest rate offered by the CD, expressed as a decimal. For example, if the interest rate is 2%, you would use 0.02 in the formula.
n: This signifies the number of times interest is compounded in a year. Monthly compounding would have n = 12, daily compounding would have n = 365 (or sometimes n = 366 for leap years), etc.
t: This represents the total time the money is invested in the CD, expressed in years.
Example:
Let’s say you invest $10,000 (P) in a CD with a 3% annual interest rate (r) compounded monthly (n = 12) for 5 years (t).
Here’s how you would use the formula:
A = $10,000 (1 + 0.03/12)^(12 * 5)

The amount of interest $10,000 will earn in a CD depends on the interest rate, the length of the term, and the compounding frequency. For example, if you invest $10,000 in a CD with an annual interest rate of 3% compounded monthly for 5 years, you can use the CD formula to calculate the interest earned.

Earning 6% on a CD is relatively rare in today’s low-interest-rate environment. However, rates fluctuate, and occasionally, promotional rates or longer-term CDs might offer higher rates. It’s best to shop around and compare offers from different banks and financial institutions.

As of now, it is uncommon for banks to offer a 7% interest rate on CDs. Such high rates were more typical in the past. To find the best current rates, you should compare CDs from various banks and credit unions. Always check for the latest offers and promotions

Certificates of Deposit (CDs) are considered a safe investment because they offer a guaranteed return and are typically insured by the FDIC up to $250,000. They are a good option for risk-averse investors looking for a predictable return. However, the interest rates on CDs are generally lower compared to other investment options, and the money is locked in for the term of the CD, which might not be ideal if you need quick access to your funds.

सीडी (Certificate of Deposit) का फार्मूला है:
A = P (1 + r/n)^(n*t)