CD Calculator Formula
Understand the math behind the cd calculator. Each variable explained with a worked example.
Formulas Used
Value at Maturity
maturity_value = deposit * pow(1 + apy / 100, years)Interest Earned
interest_earned = maturity_value - depositVariables
| Variable | Description | Default |
|---|---|---|
deposit | Deposit Amount(USD) | 10000 |
apy | APY (Annual Percentage Yield)(%) | 5 |
term_months | Term(months) | 12 |
years | Derived value= term_months / 12 | calculated |
How It Works
CD Interest Formula
Maturity Value = Deposit × (1 + APY/100)^years
CDs typically offer higher rates than savings accounts in exchange for locking up your money for a fixed term.
Worked Example
$10,000 CD at 5% APY for 12 months.
deposit = 10000apy = 5term_months = 12
- 01Value = $10,000 × (1.05)^1 = $10,500
- 02Interest earned = $500
Frequently Asked Questions
What happens if I withdraw early?
Early withdrawal typically incurs a penalty of 3-12 months of interest, depending on the CD term.
Learn More
Guide
Understanding APR vs. APY
Learn the difference between APR and APY, why they matter for loans and savings, and how to use each when comparing financial products. Includes formulas and real-world examples.
Ready to run the numbers?
Open CD Calculator