Compound Interest Calculation Online
Calculates the compound interest or principal amount or interest rate on basis of selected values.
Find compound interest for annual, half yearly or quarterly compound interest. Compound interest is a concept of adding accumulated interest back to principal amount. The act of declaring interest to be principal is called compounding and
Formula for Compound Interest is :
A = P(1 + r/n)nt
A = Total Amount (principal + interest),
P = Principal Amount
I = Interest Amount
R = Annual Nominal Interest Rate in percent
r = Annual Nominal Interest Rate as a decimal = R/100
t = Time Involved in years, 0.5 years is calculated as 6 months, etc.
n = number of compounding periods per unit t; at the end of each period
Importance of compound interest
The interest is added to the principal for next cycle of interest calculation, means compound Interest will make a deposit or loan grow at a faster rate than simple interest. In the case of simple interest that is calculated only on the principal amount. The interest can be compounded either daily, monthly, quarterly or yearly.
If we campare compounding interest on a monthly or quarterly basis, monthly compounding gives a higher yield.