Compound Interest Calculator

What is Compound Interest?

Compound interest is interest earned on both the principal amount and the accrued interest from prior periods. This is unlike simple interest, where interest is only calculated on the initial principal, allowing your money to grow exponentially over time.

Why is Compound Interest Important?

Compound interest plays a vital role in wealth creation because:

• It allows for rapid growth of investments over time.
• It benefits the initial investors as the money gets a chance to earn and multiply.
• It is implemented in savings account, fixed deposit, and other long-term investment accounts.
• It also gives insight into the effect of reinvestment of profit

What is Compound Interest Calculator?

A Compound Interest Calculator is an online application which can assist in estimating how much money an investment will yield after a period of time through the compound interest formula. This avoids manual computation and provides insights quickly about earnings.

How is Compound Interest Calculated?

The formula for compound interest is:

A= P x (1+r/n)^nt

Where:

A = Final amount after interest
P = Principal (initial investment)
r = Annual interest rate (in decimal form)
n = Number of times interest is compounded per year
t = Number of years

For example, if you invest ₹1,00,000 at an annual interest rate of 8% compounded quarterly for 5 years, the final amount will be:

A=1,00,000× (1+0.08/4)^4x5 = ₹1,48,595

Who Can Use This Compound Interest Calculator?

This tool is useful for:

• Investors & Savers – To estimate returns on savings accounts, fixed deposits, or mutual funds.
• Students & Researchers – To study the impact of compounding over time.
• Loan Borrowers – To understand interest accumulation on loans.
• Financial Planners – To create investment strategies for long-term wealth creation.

How to Use the Equirus Wealth Compound Interest Calculator?

1. Enter Principal Amount – Input the initial investment.
2. Enter Interest Rate – Enter annual interest rate
3. Select Compounding Frequency – Determine if interest compounds annually, semiannually, quarterly, or monthly
4. Enter Investment Duration – Input number of years
5. Click 'Calculate' – Instantaneous result

Benefits of Using Compound Interest Calculator

1. Accurate Computation – Prevents human mistake.
2. Time-saving – Instant computation.
3. Investment Planning – Used for long term investment planning.
4. Scenarios Analysis-It compares different interest rates and compounding frequencies.