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Compound Interest Calculator

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Compounding is when you earn interest on your investment over a period of time, due to which you witness a growth on your earnings. Power of compounding enables your earnings to grow as your investments grow. Here's how you can understand this better. An interest is added on the initial investment (principal amount), this interest is the compound interest. Since the amount would be added to the initial investment and the new interest is calculated on this amount, the investment will continue to grow as this process would be consistent all throughout the investment period.

What is a 5paisa Compound Interest Calculator?

A  5paisa compound interest calculator makes it easier to calculate compound interest so that you don’t need to make any manual calculations. You can also use a compound interest calculator to calculate returns on investments that offer compounding returns, like mutual funds.

How 5paisa Compound Interest Calculator Works?

5paisa’s compound interest calculator uses the compound interest formula to calculate the total interest. The formula has three variables:
    Principal (P)
    Rate (R)
    Compounding Frequency (N)
Here, N represents the total number of times that compounding occurs over a given time period. For instance, if you’ve made an investment for 10 years and the compounding frequency is half-yearly, N will be 20 (i.e., 10 years x 2 times/year).
The N is important because the compounding frequency may differ from one investment to another. An online compound interest calculator will give you the option to choose from a monthly, quarterly, yearly, etc. compounding frequency so you can choose the frequency appropriate for your case. When you input the required number in the compound interest calculator, the algorithm will do the math for you and display the total interest you’ll earn over the investment’s holding period.
Therefore, the compound interest formula is:

Compound Interest Calculator Formula

How does the 5paisa Compound Interest Calculator work?

5paisa’s compound interest calculator is fairly easy to use. You need to enter three inputs to get your total interest amount — the principal invested, the rate of interest earned, and the holding period of the investment.
Once you’ve entered all three variables in the calculator, it will automatically calculate the total gains and total corpus that you’ll accumulate by the end of the tenure. If you have a target corpus that you’re aiming for, you can tweak the rate of interest or the principal to see its impact on the maturity value.

What are the Benefits of 5paisa Compound Interest Calculator?

●    5paisa’s compound interest calculator helps you calculate the compound interest you’ll earn on your investment with a single click.
●    5paisa’s compound interest calculator can help you assess how compound interest can grow your money faster than simple interest.
●    5paisa’s compound interest calculator enables you to calculate the interest taking into consideration the invested amount and the interest earned on it , while the simple interest calculator simply calculates interest on the invested amount

FAQ’s

You can choose plans where the interest is accrued daily, monthly, six-monthly or annually. Compounding will always work best when the interval of compounding is short. 
 
You can also opt for daily interest accrual, which means your interest will be compounded every single day. So, every day you will earn a new amount based on the interest added to your initial investment. The more time your money has to compound and grow, the more you will end up with. 
 

There are a number of investment opportunities today where you can benefit from plans that compound interest at regular intervals. The interest you earn from the bank, in every 6 months is added to your savings, and for the next six month, you can earn interest on the new amount.  

Mutual funds and Unit-Linked Insurance Plans (ULIPs) are two of the most common investments that utilize compound interest formulas to grow your money.  

  • The longer money sits in a compound interest account, the more benefit you will reap over the long term. 
  • With inflation, the costs of services and goods increase gradually and causes the purchasing power of currency to decline.  
  • Investing money in compounding interest accounts can be a good source for long-term cash management plans. 

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