1. What is the Compound Interest Formula?

The compound interest formula calculates the future value of an investment based on principal amount, interest rate, compounding frequency, and time period. It demonstrates how money grows over time through the power of compounding.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

Where:

• \( FV \) — Future value (USD)
• \( P \) — Principal amount (USD)
• \( r \) — Annual interest rate (decimal)
• \( n \) — Compounding periods per year
• \( t \) — Time in years

Explanation: The formula calculates how much your initial investment will grow based on the interest rate and how frequently that interest is compounded.

3. Importance of CD Investment Calculation

Details: Accurate CD investment calculation helps investors understand potential returns, compare different investment options, and make informed financial decisions for their savings goals.

4. Using the Calculator

Tips: Enter principal amount in USD, annual interest rate as a percentage, number of compounding periods per year, and investment time in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What are Ridgewood Savings Bank's current CD rates?
A: As of September 2025, Ridgewood Savings Bank offers CD rates up to 4.5% depending on the term length and investment amount.

Q2: How often is interest compounded on CDs?
A: Most banks compound interest daily, monthly, or quarterly. Check with Ridgewood Savings Bank for their specific compounding frequency.

Q3: Are CD investments FDIC insured?
A: Yes, certificates of deposit at Ridgewood Savings Bank are FDIC insured up to the maximum allowed by law.

Q4: What is the minimum investment for a CD?
A: Minimum CD investment amounts vary by bank. Contact Ridgewood Savings Bank for their specific requirements.

Q5: Are there penalties for early withdrawal?
A: Yes, most CDs have early withdrawal penalties that can reduce your earnings. Check the specific terms with Ridgewood Savings Bank.