Maturity Value Calculator
Print| Total Interest Earned | $0.00 |
When investing in fixed-income instruments like Certificates of Deposit (CDs), government Treasury bills, or corporate bonds, investors lock in capital for a specified term duration. The total sum collected at the end of that investment period—combining initial principal with accumulated interest—is the investment’s Maturity Value.
Our free Maturity Value Calculator computes the final payout amount and total interest earned across both simple interest instruments and compound interest fixed deposits.
How to Calculate Maturity Value
Maturity value calculations depend on whether interest compounds periodically or accrues as simple annual interest.
Compound Interest Maturity Value Formula (CDs & Savings):
Maturity Value (MV) = Principal × (1 + r / n)ⁿᵗ
Simple Interest Maturity Value Formula (Short-Term Notes):
Maturity Value (MV) = Principal × [ 1 + ( r × t ) ]
- Principal (P): Initial deposit or face value amount.
- r: Annual nominal interest rate (in decimal format).
- n: Compounding frequency per year (e.g., 12 for monthly, 365 for daily).
- t: Total investment duration in years.
Step-by-Step Certificate of Deposit Example
Suppose an investor purchases a 3-year Certificate of Deposit (CD) with an initial principal of $20,000 earning a fixed 5.50% annual interest rate compounded monthly (n = 12).
Let’s calculate the final maturity value and total interest generated:
Monthly Interest Rate (r / n) = 0.055 / 12 = 0.0045833
Total Compounding Periods (n × t) = 12 × 3 = 36 months
MV = $20,000 × (1 + 0.0045833)³⁶
MV = $20,000 × (1.0045833)³⁶ = $20,000 × 1.178948 = $23,578.96
Total Interest Earned = $23,578.96 - $20,000 = $3,578.96
| CD Term Duration | Starting Principal | Cumulative Interest Earned | Total Payout Maturity Value |
|---|---|---|---|
| Year 1 | $20,000.00 | +$1,128.06 | $21,128.06 |
| Year 2 | $20,000.00 | +$2,320.30 | $22,320.30 |
| Year 3 (Final Maturity) | $20,000.00 | +$3,578.96 Interest | $23,578.96 Total Payout |
Frequently Asked Questions (FAQ)
What is Maturity Value?
Maturity Value is the total dollar amount paid to an investor at the expiration (maturity date) of a financial contract (such as a bond or certificate of deposit), consisting of the original principal plus all interest earned.
How does compounding frequency affect CD maturity value?
Higher compounding frequencies yield slightly higher maturity values because earned interest is added back to principal more frequently to earn additional interest. Daily compounding yields slightly more than monthly compounding, which yields more than annual compounding.
What is the maturity value of a Zero-Coupon Bond?
For a Zero-Coupon Bond, the maturity value is its printed face value (par value, typically $1,000). Zero-coupon bonds make no periodic interest payments; instead, they are purchased at a deep discount to face value and mature at full face value.