Investment Calculator Compound Interest India

Compound Interest Formula:

\[ A = P \times (1 + R / n)^{n \times T} \]

Principal Amount (P):

INR

Annual Interest Rate (R):

Compounding Frequency (n):

Time Period (T):

years

Maturity Amount (A):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is Compound Interest?

Compound interest is the interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan. It's a powerful concept in investing that allows your money to grow faster over time.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

\[ A = P \times (1 + R / n)^{n \times T} \]

Where:

\( A \) — Maturity amount (INR)
\( P \) — Principal amount (INR)
\( R \) — Annual interest rate (decimal)
\( n \) — Compounding frequency per year
\( T \) — Time period in years

Explanation: The formula calculates how much your investment will grow based on the principal amount, interest rate, compounding frequency, and time period.

3. Importance of Compound Interest Calculation

Details: Understanding compound interest helps investors make informed decisions about savings and investments. It demonstrates how small, regular investments can grow significantly over time through the power of compounding.

4. Using the Calculator

Tips: Enter principal amount in INR, annual interest rate as a percentage, select compounding frequency, and time period in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the difference between simple and compound interest?
A: Simple interest is calculated only on the principal amount, while compound interest is calculated on both the principal and accumulated interest.

Q2: How does compounding frequency affect returns?
A: More frequent compounding (monthly vs annually) results in higher returns because interest is calculated and added more frequently.

Q3: Is this calculator specific to Indian investments?
A: While the formula is universal, the calculator uses INR currency format and is designed with Indian investment contexts in mind.

Q4: Are there any tax implications on compound interest?
A: Yes, interest earned is typically taxable income. The tax treatment depends on the type of investment and local tax laws.

Q5: Can this calculator be used for loans as well?
A: Yes, the same formula applies to compound interest on loans, though the context and implications are different.