Saving
Maturity value of a CD
The deposit grows at the APY for the number of years. Because the APY already includes compounding, no further adjustment is needed.
The Formula
A = P(1 + r)^t
The deposit grows at the APY for the number of years. Because the APY already includes compounding, no further adjustment is needed.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| P | Deposit | currency | Amount placed in the CD. |
| r | APY | rate | Annual percentage yield. |
| t | Term in years | count | Time until maturity. |
| A | Maturity value | currency | Balance at the end of the term. |
What Each Symbol Means
Pcurrency
Deposit
Amount placed in the CD.
rrate
APY
Annual percentage yield.
tcount
Term in years
Time until maturity.
Acurrency
Maturity value
Balance at the end of the term.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate cd return page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate CD Return, filed under Finance. Every number the guide produces comes from substituting into this one line.