Compound Interest Calculator
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What is Compound Interest Calculator?
A Compound Interest Calculator is a tool that helps you calculate the amount of interest earned on a deposit, considering the initial amount, interest rate, and the number of compounding periods. It takes into account the effects of compounding, where interest earned is added to the principal and earns interest in the next period, leading to the exponential growth of the invested amount over time.
How can the Compound Interest Calculator help you?
- Investment planning: By entering different variables such as the initial amount, interest rate, and the number of years, you can see the potential growth of your investment and plan accordingly.
- Loan Repayment: If you’re taking a loan, you can use a compound interest calculator to see how much interest you will pay over the loan term and plan your repayment accordingly.
- Retirement planning: By estimating the growth of your retirement savings over time, you can determine whether you’re on track to meet your retirement goals.
- Comparison of Investment Options: You can compare different investment options by entering their respective interest rates and other details and see which one generates more wealth over time.
How to use Swifttax compound interest calculator?
Here are the steps to use the SwiftTax compound interest calculator:
- Visit the SwiftTax website, click Calculators, and select the “Compound Interest Calculator” option.
- Enter the principal amount: This is the initial amount of money invested or borrowed.
- Enter the interest rate: This is the rate of interest at which the money will grow or accrue.
- Enter the number of compounding periods: This is the number of times per year that interest will be calculated and added to the principal. For example, if the interest is compounded annually, the number of compounding periods would be 1. If it’s compounded monthly, the number of compounding periods would be 12.
- Enter the time period: This is the total length of time in years during which the investment will grow or the loan will be outstanding.
- After entering the above information, press the “calculate” button to see the final amount after interest, including both the principal and the interest earned.
- Review the results to see the final amount, the total interest earned, and the interest rate.