What is Compound Interest?
Compound interest that refers to the interest that is earned or paid not only on the initial amount of money (the principal) but also on any interest that has been added to or earned over time or over the years.
With compound interest, the interest is added to the principal at specific intervals, such as daily, monthly, quarterly, or annually, depending on the terms of the financial arrangement or investment
What is Compound Interest Formula ?
Here's how compound interest works:
Initial Principal (P): This is the initial amount of money you invest or borrow.
Interest Rate (r): This is the annual percentage rate (APR) or annual interest rate that is applied to the principal amount. It represents the cost of borrowing money or the return on investment.
Time (t): This is the period for which the interest is calculated, usually expressed in years.
The formula for calculating compound interest is:
A = P(1 + r/n)^(nt)
Where:
A is the final amount of money after t years, including both the principal and the compounded interest.
P is the initial principal.
r is the annual interest rate (in decimal form, so if it's 5%, you would use 0.05).
n is the number of times interest is compounded per year.
t is the number of years the money is invested or borrowed for.
The term "n" represents the compounding frequency. If interest is compounded annually, n would be 1. If it's compounded semi-annually, n would be 2, and so on. The more frequently interest is compounded, the faster your money grows or your debt increases.
What is Compound Interest Calculator India ?
Compound Interest calculator India is an online financial calculator that helps individuals and businesses to determine the future value of an investment or the total cost of a loan or debt when compound interest is involved.
Our Compound Interest calculator India simplifies the process of calculating compound interest by allowing users to input key variables and obtain the final result without manual calculations.
How Compound Interest Calculator India work ?
Our Compound Interest Calculator India takes three input parameters (Amount, expected return rate & years) from the user and provides the estimated final accumulated return value of input amount.