Compound Interest Calculator
Compound Interest Calculator
Compound Interest is considered to be the eighth wonders of the world.
An individual can use a compound interest calculator to get the total maturity amount using the compound interest rate formula for any amount that is either lent, borrowed or invested.
What is Compound Interest Formula?
In order to use the compound interest rate calculator, one should know the following terms:
Principal is the actual amount that an individual has lent, borrowed or invested.
Rate of Interest is the percentage returns on the total principal that you receive on lending or investing. It is the percentage return you pay on borrowing.
Tenure is the period for which the principal is borrowed, lent or invested.
Compound Interest is the total interest received or paid on the Principal for a fixed tenure at a certain interest rate.
While calculating the compound interest, the interest of tenure 1 is added to the Principal, which becomes the new Principal for tenure 2. This process is repeated until the maturity year.
Maturity Amount is the total of Principal and Compound Interest.
Formulas:
A = P(1 + r/n)nt
CI = A – P
Example:
Assume you borrow Rs 10000 at an interest of 5% for 3 years.
Maturity Amount = 10000 X (1+5%)3 = Rs. 11576.25
Compound Interest = 11576.25 – 10000 = Rs. 1576.25
Why use a Compound Interest Calculator online?
Using the compound interest calculator online helps you in making a financial decision on whether to take a loan or not? whether to lend or not? and whether to invest or not? on a real-time basis. Thus, helping you grab an opportunity quick.
Advantages of using a Compound Interest Calculator:
Listed below are few advantages of using a Compound Interest Calculator:
The compound interest calculator helps you in calculating the interest and maturity irrespective of the currency denomination, that is, you can use it for calculation of money in INR, USD, JPY, EUR or any currency of your choice.
A Compound Interest Calculator helps you in making financial decisions quickly that is because you can compare the various financial opportunities on different parameters like changing the Principal, Tenure or Interest Rate on a real time basis.
The Compound Interest Calculator does all the mathematics functions online with few inputs on your end. No coding or doing the maths is needed, this makes it easy to operate.
You can view the future value of your investments with a Compound Interest Calculator, which helps in making a quick financial decision.