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How to use an online Compound Interest calculator?

• Posted by Samiran Eppili June 15, 2023 Filed in Business #Compound Interest Calculator  #Gratuity Calculator  87 views
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  The process of compounding is interesting. In simple terms, compound interest refers to the interest earned on an interest. It is probably the most effective and easiest way of growing your hard-earned savings. You can benefit from compounding by investing in financial instruments like Mutual Funds, Public Provident Funds, and Fixed Deposits. Compound interest is also used in the case of various types of Loans.

  Hence, using a simple online tool called the Compound Interest Calculator, you can see how your money can grow because of compounding interest.

   

  How does the calculator help?

  An online Compound Interest calculator lets you carry out the following calculations:

  • It lets you calculate an accurate percentage and figure of returns over a particular period. For example, you can use this online tool to know the returns on your Mutual Fund investments, Fixed Deposits, etc.
  • It also enables you to calculate the yearly returns of an investment when you want to break your investment early. However, in that case, you must also consider the associated charges.
  • This calculator lets you identify the amount of investment you need over time. This helps you arrange the funds conveniently.

  How to use the calculator?

  This online calculator makes it easier for people to calculate compound interest and keeps them away from carrying out tricky calculations manually. To use this tool, simply follow these basic steps:

  • Search for a reliable Compound Interest calculator online
  • Input the principal amount you wish to invest or have already invested
  • Set the interest rate per annum offered by the financial institution
  • Enter the period of your choosing
  • You should also mention the compounding frequency

  After you have set the values, the calculator generates the results within a few minutes. It provides an approximate value of the total amount you will receive at maturity on your investment. It will also display the total interest you will earn at the end of your investment term.

   

  Benefits of using this tool

  Some advantages of using this online calculator include the following:

   

  Accurate results

  The results displayed by the calculator are accurate. Hence, this tool is reliable.

   

  Easy to use

  This online tool has an extremely simple user interface. This advantage makes it easy for everyone to use this calculator.

   

  Freely available

  This calculator is readily available online. It is free, and individuals can conveniently use it anywhere and anytime.

   

  Is it different from a Gratuity Calculator?

  An online Compound Interest calculator shows how much your investment will grow over time by compounding interest. Alternatively, a Gratuity calculator provides an approximate idea of the Gratuity amount you will receive on retirement from your employer. Hence, it enables you to determine the compensation you will get from your company for your service. This, in turn, lets you plan your finances better and make strategic investments.