# Compound Interest Calculator

Principal Amount

Interest rate

%

1%

50%

Duration

Yrs

1 Yr

30 Yrs

### Compounding Interval

Select the interval when the interest is compounded

Total Amount

Principal Amount

0

Total Interest

0

What is Compound Interest?
Compound interest refers to a situation where an investment grows at an exponential rate, as the interest earned is added to the original principal amount, creating a larger base for earning even more interest. With compound interest, the possibilities for wealth growth are vast, which is why it is widely used in many businesses today. To accurately determine the return on investment, it is essential to have access to a trustworthy compound interest calculator.
What is Compound Interest Calculator?
A compound interest calculator is a tool used to calculate the interest earned on a principal amount over a specified period of time, taking into account the compounding effect of reinvesting the interest earned. This calculator takes inputs such as the initial investment, the interest rate, and the compounding frequency and provides an estimate of the total amount that will be accumulated after a given period of time. It is a simple and convenient way to understand the potential growth of an investment and make informed financial decisions.

Using compound interest (CI) calculator you can benefit in the following ways:

• A compound interest calculator helps determine the amount of interest earned over a specific time period and the total return on investment
• Allows for calculation of expected investment growth by inputting principal amount, interest rate, and time period
• Calculates both overall and annual returns, useful for future financial planning
• Consideration of pre-closure charges should be taken into account when evaluating an investment
• In 2016, the Indian Government updated interest rates for National Savings Certificates, making it necessary to use an online calculator to accurately calculate returns

How does CI Calculator Work?

Our FD calculator takes these main factors into account

1. Compound interest (A)
2. Principal Amount (P)
3. Rate of interest (r)
4. Number of times interest
5. compounds in a year (n)
6. Number of years (t)
The calculation of compound interest (CI) is done using the following formula:
A = P (1 + r/n) ^ nt

Here is an example for easy understanding:

For example, if you invest Rs. 10,000 with an annual interest rate of 15% for 5 years, the returns for the first year will be 10,000 x 15/100 or Rs. 1500.

For the second year, the interest will be calculated on Rs. 10,000 + Rs. 1500 or Rs. 11,500. The interest will be Rs.13,225.

For the third year, the amount will stand at Rs 1984 and so on.

Obviously, it is difficult to calculate these amounts manually. That is why you need a compound interest calculator in India to make the task easier.

## FAQs

What is compound interest? Compound interest refers to a situation where an investment increases at a rapid pace because the interest earned is added to the original principal, creating a larger base for generating more interest.

What is a compound interest calculator? A compound interest calculator is a tool that calculates the interest earned on a principal amount over a specified time frame, taking into account the compounding effect of reinvesting the interest earned.

What are the advantages of using a compound interest calculator? A compound interest calculator helps calculate the amount of interest earned over a specific period, the total return on investment, the expected growth of the investment, both overall and annual returns, and it also considers pre-closure charges when evaluating an investment.

How does a compound interest calculator determine the amount of interest earned? The compound interest calculator calculates the amount of interest earned by taking inputs such as the initial investment, the interest rate, and the compounding frequency and provides an estimate of the total amount that will be accumulated after a specified time period.

How does a compound interest calculator calculate expected investment growth? A compound interest calculator calculates expected investment growth by inputting the principal amount, interest rate, and time period.

What is the difference between overall and annual returns? Overall returns refer to the total amount of interest earned over a given time frame, while annual returns refer to the interest earned in a single year.

Should pre-closure charges be considered when evaluating an investment? Yes, pre-closure charges should be taken into account when evaluating an investment as they can have an impact on the overall return on investment.

Why is it necessary to use an online calculator after the Indian Government updated interest rates in 2016? After the Indian Government updated interest rates in 2016, it is important to use an online calculator to accurately calculate the returns on National Savings Certificates.

What inputs are required to use a compound interest calculator? The inputs required to use a compound interest calculator are the initial investment, interest rate, and time period.

How can a compound interest calculator assist in making informed financial decisions? A compound interest calculator helps make informed financial decisions by providing valuable information on the expected return on investment, such as choosing the best investment option and planning for the future.

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