1. What is Maturity Value?

Maturity Value (MV) is the total amount an investment will be worth after compounding interest over a specified time period. It represents the principal amount plus all accumulated interest.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

Where:

• \( P \) — Principal amount (initial investment)
• \( R \) — Annual interest rate (in decimal form)
• \( T \) — Time period in years

Explanation: The formula calculates how much an investment will grow when interest is compounded annually.

3. Importance of Maturity Value Calculation

Details: Calculating maturity value helps investors understand the future value of their investments, compare different investment options, and plan for financial goals.

4. Using the Calculator

Tips: Enter the principal amount in dollars, interest rate as a percentage (e.g., 5 for 5%), and time period in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between simple and compound interest?
A: Simple interest is calculated only on the principal, while compound interest is calculated on the principal plus accumulated interest.

Q2: How often is interest compounded in this calculation?
A: This calculator assumes annual compounding. For different compounding periods, the formula would need adjustment.

Q3: Can I use this for monthly investments?
A: No, this calculator is for single lump-sum investments. For regular contributions, you'd need a future value of annuity calculation.

Q4: What if my interest rate changes over time?
A: This calculator assumes a constant interest rate. For variable rates, you'd need to calculate each period separately.

Q5: How accurate is this calculation?
A: The calculation is mathematically precise for the given inputs, but actual investment returns may vary due to market conditions.