Compound interest Calculator
Compound Interest Calculator
Formula for Compound Interest
Where:-
- A is the amount of money accumulated after n years, including interest.
- P is the principal amount (the initial money).
- r is the annual interest rate (decimal form).
- n is the number of times the interest is compounded per year.
- t is the time the money is invested or borrowed for, in years
Steps to calculate compounding interest calculator
- Principal (P): The initial amount invested.
- Annual Interest Rate (r): The rate of interest, in percentage. Convert it to decimal form (i.e., 5% becomes 0.05).
- Compounding Frequency (n): The number of times interest is compounded per year. Common frequencies are:
- Annually: n = 1
- Quarterly: n = 4
- Monthly: n = 12
- Time (t): The number of years the money is invested.
Example compound calculator
If you invest ₹10,000 at 5% annual interest, compounded monthly, for 3 years:
- P = ₹10,000
- r = 5% = 0.05
- n = 12 (monthly compounding)
- t = 3 years
Compound Interest Calculator
Advanced Compound Interest Calculator
How often should I compound my interest for maximum growth?
The more frequently interest is compounded (e.g., monthly vs. annually), the faster your investment grows.
What is the best way to use a compound interest calculator?
Input realistic values for principal, rate, and time to evaluate different investment options.
Is compound interest better than simple interest?
Yes! Compound interest grows your money faster because it calculates “interest on interest,” unlike simple interest, which is calculated only on the principal.
Conclusion
Compound interest is a powerful financial concept that can significantly grow your wealth over time. Whether you’re saving for retirement, a dream vacation, or your child’s education, a Compound Interest Calculator can help you make smarter investment decisions. Start using one today and watch your money work for you!