Compound Interest Calculator

Compound Interest calculator

Compounding interest, as opposed to simple interest, is the method whereby your wealth increases exponentially because you earn interest on your total investments, the aggregation of your principal amount and the interest it incurs.

How to use NISM’s Compound Interest calculator?

The Compounding Interest Calculator ask the user to enter following four inputs: –

1. Principal Amount – The amount one wish to deposit for a stated tenure.
2. Expected rate of Interest (per annum) – HThe interest rate one can expected on invested amount during the tenure of the investment.
3. Time Period (In Yrs)– The number of years for which user money will stay invested.
4. Time Period (In Yrs)– The number of years for which user money will stay invested.
5. Compounding Frequency The compounding take place on stated frequency. Generally, most of the financial products offer annual compounding rate of interest. However, few financial institutions offer half-yearly / quarterly compounding of interest as well. The more the compounding frequency, higher would be the return made on investment.

The Compounding Interest Calculator generates the following output for the user: –

• Total Invested – It let the user knows how much money s/he invested as principal amount during the investment period.
• Interest earned – It generates how much interest income added to investor portfolio on account of invested money.
• Total Value of Investment – It shows how much is the value of investor portfolio after the tenure of the investment. It includes the principal invested and interest earned thereon.

It calculates the interest amount based on compound interest frequency chosen by the user. All the interest payments are considered as received at the end of the period.