Compound Interest Calculator

What is Compound Interest?

Interest calculated on the principal and current interest combined over a specified period is known as compound interest. Over time, interest accrued on a principal is also added to the principal, giving the new principal amount for the next month. Again, the principal value that has accumulated is used to determine the interest for the subsequent period. Compound interest is the interest calculation method utilised in all commercial and financial operations worldwide. To understand more about compound interest, keep reading this detailed guide below.

What is a Compound Interest Calculator?

Over a specific period, compound interest rates allow your investment to increase significantly. A compound interest calculator India shows an investment's growth over time based on a certain compound interest rate. This calculator can be used to calculate compound interest on a daily, weekly, monthly, quarterly, semi-annual, and annual basis. All you have to do is enter the principal amount, interest rate, investment period, and compound interest frequency for the calculation to be accurate.

Compound Interest Example

The principal amount is subtracted from the compound amount to determine the compound interest. Therefore, the following formula can be used to determine the compound interest.

CI = P (1 + r/n)nt - P

• P is the principal amount
• r is the rate of interest (decimal obtained by dividing the rate by 100)
• n is the number of times the interest is compounded annually
• t is the overall tenure.
• For instance, if you invest Rs. 50,000 for five years at a 10% annual interest rate, the returns in the first year will be Rs. 5,000, or 50,000 x 10/100.
• Interest will be calculated on Rs. 50,000 + Rs. 5000, or Rs. 55,000, for the second year. There will be 5550 rupees in interest.
• The sum will be Rs 6055 for the third year, and so forth.

How Compound Interest Calculator Works?

To use the daily compound interest calculator follow these steps.

• Step 1: Enter the Amount of the Investment
  You have the option to choose a monthly investment amount or a single sum.
• Step 2: Enter the Anticipated Rate of Return
  The estimated rate of return on the investment must be entered here.
• Step 3: Choose the Compounding Interval
  Here, you must choose between the following options for the compounding frequency: daily, monthly, quarterly, and annual.

Compound Interest Formula & Steps to Calculate Compound Interest

A is the total amount, P is the principal, r is the interest rate, n is the number of times interest compounds over a certain period, and t is the time in years. 

The compound interest formula is A = P(1 + r/n)^(nt)

• When calculating compound interest, the original principal amount is multiplied by one plus the annual interest rate raised to the number of compound periods minus one. 
• Then, from the final valuation, the entire initial principal amount is deducted.

How Can a Compound Interest Calculator Help You?

Compound interest's nature makes it very profitable for companies. The following advantages come with using a compound interest calculator online.

• It assists you in calculating an exact amount and returns percentage over a given period.
• You can determine how much investment you would require over time with the aid of a trustworthy calculator. After that, it will be convenient to arrange the necessary corpus of finances.
• A compound interest calculator can also help you determine the total returns you will receive while exiting an investment. 

Benefits of BlinkX Compound Interest Calculator

You can use a compound interest calculator to get calculations that show your investment returns. For investors, it is a beneficial instrument with several advantages. Some of the main advantages of using a BlinkX compound interest calculator are as follows: 

1. Dependent: A compound interest calculator is a dependable financial instrument for determining the amount of investment required over a certain period.
2. Customisable: Numerous online compound interest calculators can assist you in allocating investments according to your needs.
3. Estimates Total Returns: A compound interest calculator is a useful tool for determining the potential total returns from a particular investment choice. This facilitates future financial planning.

Difference Between Simple Interest and Compound Interest

The differences between simple interest and compound interest are as follows.