Compound Interest Calculator

Understanding Compound Interest

Compounding interest, as opposed to simple interest, is the situation where your wealth increases exponentially because you earn interest on your total investments, the aggregation of your principal amount and the interest it incurs. Mathematically, the possibilities of compound interest are endless. Most of the modern business thrives on it.

How can a Compound Interest Calculator Help You?

• It helps you determine an accurate figure and percentage of returns over a certain time frame.
• A reliable calculator helps you identify how much investment you might need over a time frame. The required corpus of funds can then be arranged with convenience.
• Our customizable compound interest rate calculator helps you assign values based on your requirements.
• It helps calculate the total returns as well as yearly returns in case you need to consider breaking such an investment as per your future financial planning.
• To keep deposit rates in line with the market, the Indian Government decided to annualize the interest rates on National Savings Certificates. The changes were effected in 2016. To determine how much your savings schemes now work, you must use an online calculator.

How to Calculate Compound Interest?

We use a globally standardized method to determine the total compound interest accrued. The formula is:

A = P (1 + r/n) ^ nt

Where:
A = Final amount
P = Principal amount
r = Annual interest rate (in decimal form)
n = Number of times interest is compounded per year
t = Number of years

Example Calculation

If you invest ₹50,000 with an annual interest rate of 10% for 5 years:

• First year: 50,000 × 10/100 = ₹5,000 interest
• Second year: (50,000 + 5,000) × 10/100 = ₹5,500 interest
• Third year: (55,000 + 5,500) × 10/100 = ₹6,050 interest
• And so on...

How to Use Our Calculator