1. What is PPF (Public Provident Fund)?

Definition: PPF is a long-term savings scheme with tax benefits, backed by the Indian government, with a 15-year maturity period.

Purpose: It helps individuals save for retirement while offering tax-free returns and principal amount.

2. How Does the PPF Calculation Work?

The calculator uses the formula:

Where:

• \( Maturity \) — Final amount at maturity
• \( P \) — Annual deposit amount
• \( i \) — Annual interest rate (in decimal)
• \( n \) — Investment period in years

Explanation: The formula accounts for yearly compounding of interest on deposits made at the beginning of each year.

3. Importance of PPF Calculation

Details: Accurate calculation helps in financial planning, understanding compound growth, and comparing with other investment options.

4. Using the Calculator

Tips: Enter annual deposit amount, current PPF interest rate (default 7.1% as 0.071), and investment period (default 15 years).

5. Frequently Asked Questions (FAQ)

Q1: Why is the formula multiplied by (1 + i)?
A: This accounts for deposits being made at the beginning of each year, earning interest for the full year.

Q2: What's the current PPF interest rate?
A: As of 2023, it's 7.1% annually, but this changes quarterly based on government notifications.

Q3: Can I extend my PPF beyond 15 years?
A: Yes, in blocks of 5 years after the initial 15-year period.

Q4: Is there a maximum deposit limit?
A: Yes, the maximum annual deposit is ₹1.5 lakh (or equivalent in your currency).

Q5: How is PPF different from other investments?
A: PPF offers EEE (Exempt-Exempt-Exempt) tax benefits and sovereign guarantee on returns.