Identify the principal amount (P)
Identify the annual interest rate (R)
Identify the tenure in years or months (T)
Determine whether the interest is simple or compound
Use the simple interest formula: Interest = (P × R × T) / 100
Use the compound interest formula: Maturity Amount = P × (1 + R/100)^T
Calculate interest earned: Interest = Maturity Amount – Principal
If tenure is in months, convert it to years by dividing by 12
If interest is compounded quarterly, use the quarterly rate and number of quarters
If interest is compounded monthly, use the monthly rate and number of months
Add any applicable taxes or deductions to the final amount if required
Verify the bank’s FD terms for compounding frequency and payout method