Calculate Compound Interest on an Investment or Savings using the Compound Interest Calculator. Simply, provide the inputs Principal, Rate of Interest, Time Period, number of compounding units in the respective input provision and press the calculate button to get the Compound Interest Value in no time.

**Compound Interest Calculator: **Estimate the amount of money you earn on a deposit by making use of the online tool. Read on to find answers to your questions like What is meant by Compound Interest, Formula to Calculate it, etc. The tool is simple to use and allows you to choose the compounding intervals. Get to know about the procedure to calculate the Compound Interest explained in detail. Check out solved examples for a better understanding of the concept.

Compound Interest is the Interest calculated on the initial principal and interest that has been accumulated. In this concept of adding a carrying charge will make the loan grow fast. Compound Interest can be complex as it takes into consideration the annual interest rate, number of years, compounding frequency.

A = P(1 + r/n)^{nt}

Simply substitute the given data as per the formula and perform basic math operations to get the Compound Interest.

Where, A = Accrued Amount (principal + interest)

P = Principal Amount

I = Interest Amount

R = Annual Nominal Interest Rate in Percent

r = Annual Interest Rate as a Decimal

r = R/100

t = number of years the money is invested for

n = Compounding Frequency

The Formula to calculate the Compound Interest is given as such

C. I = Amount - Principal

Simply substitute the given data as per the formula and perform basic math operations to get the Compound Interest.

**Example**

Question : A sum of Rs. 40,000 is borrowed and the rate of interest is 10% per annum. What is the compound interest for 5 years when the principal is compounded for every year?

**Solution:**

As per the given data P = 40, 000

R = 10% = 10/100 = 0.01

n = 1 year

t = 5 years

Substitute the given data in the formula **A = P(1 + r/n) ^{nt}**

= 40,000(1+0.01/1)^{1.5}

=40, 000(1.01)^{5}

= 64, 420.40

C. I = 64, 420.40 - 40, 000

= 24, 420.40

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**1. What is meant by Compound Interest?**

Compound Interest is the interest on both the initial principal and the interest accumulated on the principal so far.

**2. What is the formula for Compound Interest?**

Compound Interest = Amount - Principal

Amount A = P(1 + r/n)^{nt}

**3. Where do I get a detailed procedure to calculate Compound Interest?**

You can get a detailed procedure to calculate Compound Interest on our page.

**4. What is the formula for the amount if it is compounded annually?**

The Formula for Amount, if it is compounded annually, is A = P(1+R/100)^{t}.