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##### Asked by: Aroia Widmer

business and finance interest rates# How do you calculate maturity value?

Last Updated: 12th January, 2020

**maturity value**formula is V = P x (1 +r)^n.You see that V, P, r and n are variables in the formula. V isthe

**maturity value**, P is the original principal

**amount**,and n is the number of compounding intervals from thetime of issueto

**maturity**date. The variable r representsthat periodicinterest rate.

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Just so, how do you calculate maturity and simple interest?

**Simple Interest Formulas and Calculations:**

- Calculate Total Amount Accrued (Principal + Interest), solveforA. A = P(1 + rt)
- Calculate Principal Amount, solve for P. P = A / (1 + rt)
- Calculate rate of interest in decimal, solve for r. r=(1/t)(A/P - 1)
- Calculate rate of interest in percent.
- Calculate time, solve for t.

Subsequently, question is, what is maturity value or future value? When the period of an investment ends,**maturityvalue** is the sum of principal and interest -- themoney paidinto the investment and the **amount** the investmentearned.Calculating **maturity**, or **future value**, withcompoundinterest paid annually follows a standardequation.

Herein, what is maturity value in compound interest?

**Maturity Value** Definition. To calculatethe**maturity value** or the **maturity amount** fortheinvestments which are made by the investor, they need to sum upallof the **compounding interest** which they have earned overtheperiod to the initial or the principal**amount**invested.

What is the formula of rate?

Many everyday problems involve **rates** ofspeed,using distance and time. We can solve these problemsusingproportions and cross products. However, it's easier to use ahandy**formula**: **rate** equals distance divided by time: r=d/t.