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Calculate returns on your investments with compound interest
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Investment
Interest
| Year | Investment | Interest Earned | Total Value |
|---|---|---|---|
| 1 | ₹1,00,000 | ₹8,000 | ₹1,08,000 |
| 2 | ₹1,00,000 | ₹16,640 | ₹1,16,640 |
| 3 | ₹1,00,000 | ₹25,971 | ₹1,25,971 |
| 4 | ₹1,00,000 | ₹36,049 | ₹1,36,049 |
| 5 | ₹1,00,000 | ₹46,933 | ₹1,46,933 |
A = Final Amount (Principal + Interest)
P = Principal Amount (Initial Investment)
r = Annual Interest Rate (in decimal)
n = Number of times interest is compounded per year
t = Time period in years
Compound interest is the interest calculated on the initial principal and also on the accumulated interest of previous periods. This means you earn interest on your interest, which can significantly increase your wealth over time. The power of compounding is often called the "eighth wonder of the world" due to its ability to grow wealth exponentially.
Start investing early and invest regularly to maximize the benefits of compound interest. Even small monthly contributions can lead to substantial wealth over long time periods due to the power of compounding.