*%*

₹ 61,051

Compound Interest Amount

₹ 1,00,000

Principal Amount

₹ 1,61,051

Total Amount

37.91

*%*
Interest % to Total Amount

#### What is the Compound Interest ?

The interest you earn each year is added to your principal, so that the balance doesn't merely grow, it grows at an increasing rate.

#### What is Principal Amount ?

The amount which you have invested.

#### What is Interest Rate ?

An interest rate is the cost of borrowing money, or conversely, the income earned from lending money. Interest rates are expressed as percentage of the principal per period.

#### What is No. of Years ?

Period in which you have invested.

#### What is Frequency?

The number of compounding periods in one year.

Here is the formula for finding the compound interest

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

- A = value after t periods
- P = principal amount (initial investment)
- r = annual interest rate
- n = number of times the interest is compounded per year
- t = number of years the money is borrowed for / money is invested for

John has invested 1,00,000 at compound interest rate of 10% for 5 Years where interest compounded yearly with principal

- P (Principal Amount) = 1,00,000
- r (Rate Of Interest) = 10 %
- n (Compund Frequency) = 1
- t (Period) = 5 Year

##### Compound Interest Calculation Steps

- A = P (1 + r/n)
^{nt} - A = 1,00,000 (1 + 10 / (100 * 1))
^{1 * 5} - A = 1,00,000 (1 + 10 / 100)
^{5} - A = 1,00,000 (1 + 0.1)
^{5} - A = 1,00,000 (1.1)
^{5} - A = 1,00,000 (1.61051)
^{5} - A = 1,61,051