Compound interest is fundamentally a situation where your wealth increases at an exponential level because you earn interest on your total investments along with your principal amount, and the interest it incurs. However, today when everything is based on the fundamental of economics, it is important to have a reliable compound interest calculator by your side so that you can see that what you are earning is fair.
Where
P is Principal Loan Amount
A is Compound Interest
N/n is Number of times interest compounds in a year
R/r is Rate of interest
T/t is Number of years
For example : Let’s say you invest an amount of INR 10,000 and the annual interest rate is 10% for a period of 5 years.
The returns for the
First Year = 10,000x10/100 => 1000
Second Year = 10,000 + 1,000 => 11,000
This means that the interest will be INR 1,100. And this is how the chain of interest will keep on moving year on year.