CI Calculator
A Compound Interest (CI) calculator is a simple tool that helps you calculate the compounded future value of your principle amount.
What is compound Interest?
Compound interest is the interest calculated both on the initial principal and the accumulated interest from previous periods. It can be thought of as “interest on interest” The rate of compounding depends on the frequency of compounding, the higher the frequency higher the compounding.
Albert Einstein once famously said that “Compound Interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t…pays it.”
How to calculate compound interest?
The compound interest formula:
FV = p * (1 + i)^n –1
where,
p – principal amount
i – rate of interest
n – compounding intervals
Final Words
Compound interest is calculated by multiplying the initial principal amount by one plus the annual interest rate raised to the number of compound periods minus one.
Interest can be compounded on any given frequency schedule, from continuous to daily to annually. When calculating compound interest, the number of compounding periods makes a significant difference. Higher the compounding periods, higher the compounding.