Calculate Compound Interest
Principal Amount:
₹0
Interest Rate:
0%
Time Period:
0 years
Compounding:
-
Compound Interest:
₹0
Maturity Amount:
₹0
About Compound Interest
Compound Interest (CI) is calculated on the principal amount and also on the accumulated interest of previous periods. This is known as "interest on interest".
Compound Interest Formula:
A = P (1 + r/n)^(nt)
Where:
A = Maturity Amount
P = Principal Amount
r = Annual Interest Rate (in decimal)
n = Number of times interest is compounded per year
t = Time period in years
CI = A - P
Compounding Frequencies:
- Annually: Interest compounded once a year (n=1)
- Semi-Annually: Interest compounded twice a year (n=2)
- Quarterly: Interest compounded 4 times a year (n=4)
- Monthly: Interest compounded 12 times a year (n=12)
- Daily: Interest compounded 365 times a year (n=365)
When to Use Compound Interest:
- Fixed Deposits (FD)
- Recurring Deposits (RD)
- Savings accounts
- Mutual funds and investments
- Credit card debt
Example:
Principal = ₹10,000
Rate = 10% per annum
Time = 2 years
Compounding = Annually
A = 10,000 (1 + 0.10/1)^(1×2) = ₹12,100
CI = ₹12,100 - ₹10,000 = ₹2,100