How to Use a Compounding Calculator: A Beginners Step-by-Step Guide

Using a compounding calculator is a straightforward way to understand how your investments grow over time. This tool helps you calculate the compound interest on your savings or investments, showing how much you will earn in the future. In this article, we will explain a step-by-step guide to using a compounding calculator effectively. What is a Compounding Calculator? A compounding calculator is a tool for showing the growth of the funds invested for a certain time. Your start amount, interest rate, and the time work out your returns. The interest earned adds to your major amount, and the total earns interest once again. This process is called compounding. For Example: Suppose you invested Rs 1,000 at a 6% interest rate for 5 years. If the interest is compounded once a year, your funds will grow to about Rs 1,338. In case it is compounded every month, it will grow by a slight margin due to regular adding. Why use a compounding calculator? This tool helps you plan your funds. You can ...