Compound Interest Calculator
This compound interest calculator has extra features than most. Both the deposit intervals and the compounding intervals can be varied from daily to annually (and everything in between)
This flexibility helps you to calculate as well as compare the expected interest earnings on various investment scenarios so that you understand if an 8% return, compounded daily is better than a 9% return, compounded annually.
It's simple to use. Just enter your beginning balance, the regular deposit amount at any specified interval, the rate of interest, compounding interval, and the expected number of years allowed growing your investment.
Compound interest is considered as the most powerful concept in finance. It can either work for you or will work against you: Compound interest is the foundational concept for both how to build wealth and why it's so crucial to pay off debt as soon as possible.
The simplest way to take advantage of compound interest is to start saving.
Simply put, when interest gets added to the principal amount of an investment, loan or deposit, it is known as compound interest. It is called as compound interest because the accumulated interest is added to the principal amount and the interest for the upcoming period will be calculated on the new amount, which is nothing but the principal amount plus the amount of the accumulated interest over the prior period. This process will be repeated throughout the investment’s tenure. So practically, the interest is calculated on the compounding of the principal amount and the interest that is generated previously. The power of compounding lies in the fact that it essentially increases the investment amount every year by factoring in the interest amount generated earlier, therefore, giving it a definite edge over simple interest.
How to calculate compound interest?
The formula for computing compound interest is A = P (1 + r/n) ^ nt
For this formula, P is the principal amount, r refers to rate of interest per annum, n denotes the number of times in a year the interest gets compounded, and t is the number of years.