In the investment world, the power of compounding shows how rapidly your money will grow and give you a high return of an investment. When you earn interest on savings and interest on interest is known as compounding.
Compound interest is the interest that is calculated on the initial principal. It is also known as interest on interest. When calculating compound interest, the number of compounding periods makes a significant difference. It is one of the most useful concepts of investment.
There are two different methods to calculate compound interest are listed below-
- Compound interest formula: The compound interest equation will help you to determine how much compound interest you will get on savings.
A = P(1 + r/n)nt
Where A stands for “Amount.”
P stands for principle.
R stands for rate
N stands for compounding period per unit
T stands for Time involved in years.
To calculate compound interest, all you need is to do, just put all the details in this equation and get the result. One of the significant drawbacks of this equation is that human error. The possibility of getting the wrong answer is higher. So, to overcome this drawback, financial companies have launched an online compound interest calculator.
- Online compound interest calculator: A compound interest calculator is an online tool that is used by the investors to calculate compound interest on savings. It is very easy and convenient to use and gives users an accurate interest. This tool gives a clear insight to the investors about the compound interest and helps in taking investment decision wisely. There are numbers of benefits of using this tool, and some of them are listed below-
- This tool gives you an accurate compound interest calculation.
- This tool is very easy to use and access from any platform.
- This tool saves investors time.
- This tool permits you to choose the amount, rate of interest, Time to calculate compound interest. According to your input, you will get the exact amount.
- This tool is free to use.
- This tool helps investors to decide whether they should invest in specific investment policy or not.
If you want to know the exact value of the compound interest, then without thinking much, use this tool. It is customizable; you can alter the values until you are satisfied with the results.
Features of compound interest:
- If you want to know how much your investment yield, then click on the compound interest calculator and get the accurate value based on your inputs.
- The online compound calculator is customizable, you can insert values and alter it as per your requirements.
- One of the prominent sides of the compound interest calculator is that it will help you double your money.
We hope now you understand the importance of compound interest and how to use it. You can avail of this calculator of any reputed company and get the accurate result in a blink of an eye.