Calculators

Compound interest Calculator

Compound interest is often an overlooked aspect of investing. It helps you earn interest on interest, so your investments grow exponentially instead of linearly. Many investment options offer the benefit of compounding — including cumulative fixed deposits, Public Provident Fund (PPF), National Savings Scheme (NSC) and equity mutual funds. To understand how your investments will grow with the power of compounding, you can use the Research 360 compound interest calculator.

Compound interest Calculator

Investment Amount (₹) Value Of Your Investment Today

Rate of Interest (% p.a.) Expected annual returns on your investment. Different asset classes provide different returns. E.g. You can expect 7.5% returns on your fixed deposits but 15% returns on a mutual fund investment in the longer run

Investment period (In years) No. of years you wish to invest for effect

Compounding Frequency

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Total amount after 7 years

₹ 0

Total Invested

-

Total Interest

-

What is a Compound Interest Calculator?

A compound interest calculator is a financial planning tool available free of cost online. It considers the principal invested, the rate of interest and the investment duration to find the compound interest you will earn on your investment. It will also show you the total amount that your investment will grow to. These details are crucial for informed decision-making.

On the Research 360 Platform powered by Motilal Oswal, you can use the compound interest investment calculator free of cost. You can also use it as many times as needed for more clarity on how different investment scenarios work.

How Can a Compound Interest Calculator Be Useful to You?

A compound interest calculator can be useful for financial planning in several ways. When you are considering any new investment, you need to assess the potential returns from that scheme or asset. This will help you understand how much your investments could potentially grow. With this information, you can assess whether a particular investment will be a suitable addition to your portfolio.

The calculator uses the compound interest formula to instantly compute how much interest you may earn on the principal amount invested. You can also customise your inputs to check how different investment amounts will grow over different investment periods, at varying rates of interest.

By using a compounding calculator, you can also check if the final corpus will be adequate to meet your financial goals. If you discover that the maturity may be insufficient, you can consider increasing your investments or adjusting your expectations accordingly.

What is the Process for Calculating Compound Interest?

To calculate compound interest, you need to use the compound interest formula, which requires some basic information like the amount invested, the interest rate, the investment period and the compounding frequency.

The compound interest formula used by the calculator is shown below:

Compound Interest = P [(1 + r/n)nt — 1]

Here,

P is the initial amount invested

r is the annual interest rate entered in the decimal format

n is the number of times the interest is compounded annually

t is the investment tenure in years

If you have the above-mentioned details, you can use the compound interest formula to find the interest you will earn. To avoid any human errors and save time, you can instead rely on the compounding calculator.

How to Use the Research 360 Compound Interest Calculator?

To use the compound interest calculator on the Research 360 platform, simply follow the steps outlined below:

  • Step 1:Enter the principal. This is the amount that you want to invest.
  • Step 2: Enter the rate of compound interest per annum. This may be known or estimated, depending on the type of investment.
  • Step 3: Enter the period of investment in years.

Once you submit these details, the compounding investment calculator instantly shows you the principal, interest earned thereon and the total value of the investment at maturity.

What are the Advantages of Using the Compound Interest Calculator?

The compound interest calculator available on the Motilal Oswal Research 360 platform offers many advantages to users. They include:

  • Quick and Easy Calculation

    The compound interest calculator performs the necessary calculations quickly and ensures that you can easily evaluate the interest earned within seconds.

  • Time-Saving Computation

    Manually calculating the interest with the compound interest formula can be time-consuming and difficult. With this calculator, however, you can save time and accelerate your decisions in an informed manner.

  • Unlimited Free Usage

    The compound interest calculator is free to use on the Research 360 platform. You need not pay any fees to use the tool. You can also use it as many times as needed.

  • Easy Comparative Analysis

    With this calculator, you can compare different investment schemes and identify the most lucrative option. You can also see how different principal amounts, interest rates and investment tenures affect the interest earned.

Compound Interest Calculator FAQs

A compound interest calculator uses the principal amount, tenure, compounding frequency and interest rate to find the expected growth. It uses the compound interest formula, which tells you the compound interest earned.

The calculator determines interest earned by subtracting the initial principal from the final amount. It calculates the total growth using the compound interest formula and then finds the interest portion by removing the original investment amount from the result.

The inputs typically for a compound interest calculator include the initial principal amount, annual interest rate, compounding frequency (e.g., annually, monthly, daily) and investment duration.

A compound interest calculator projects your investment growth. This can help you compare different scenarios and understand the power of compounding. It also allows you to adjust variables and see how changes impact your long-term returns. This makes it easier to set goals and develop investment strategies.

A compound interest calculator computes the future value of an investment or loan. It specifically accounts for the interest that accrues on both the principal and previously earned interest. This way, you get a clear projection of how your money grows over time with compound interest.

This logic is based on the principle of earning interest on previously earned interest. For each compounding period, the interest is calculated on the current balance, which includes both the original principal and accumulated interest. This leads to exponential growth over time.

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