What is Compounding Interest?

Compounding interest is the concept of earning interest on both the initial principal and the accumulated interest of an investment. In simpler terms, it’s like earning interest on interest. Over time, compounding can significantly boost the growth of your savings or investments.

How Does Our Calculator Work?

Our compounding interest calculator makes it easy to see how your money can grow over time. Here’s how it works:

1. Enter your Principal amount, the amount you are willing to invest.

2. Enter your Interest Rate, Time in Years (The amount of time you want to keep compounding) in the same way.

3. Choose the compounding frequency depending on when your interest is paid. Yearly means once a year, Half yearly means twice and Quarterly means 4 times a year.

The formula behind the calculator:

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

Where:
A is the future value of your investment, including interest.
P is the principal investment amount (Initial investment).
r is the annual interest rate.
n is the number of times that interest is compounded per unit of t.
t is the time the money is invested, in years.