Compound Interest is a type of interest that is calculated based on the initial amount of money (principal) and the accumulated interest over time. It means that the interest is added to the principal every time period, and then the new interest is calculated on the increased amount. This way, the money grows faster than Simple Interest, which is calculated only on the principal.
To understand how Compound Interest works, let's look at a simple example. Suppose you have 1000 and you deposit it in a bank account that pays 10 annual interest compounded yearly. This means that every year, the bank will add 10 of your balance to your account. After one year, you will have 1100 (1000 + 100 of 1000). After two years, you will have 1210 (1100 + 110 of 1100). This is more than what you would get with Simple Interest, which would be 1200 (1000 + 100 + 100). With Compound Interest, you get interest on interest too by adding the interest amount to the principal amount. Now we will discuss about Advanced Compounding.|
To use Compounding in Reckoner Multi Calculator, you need to enter the following information:
- Principal: The initial amount of money you invest or borrow.
- Rate: The annual interest rate expressed as a percentage.
- Time: The duration of the investment or loan in years.
Total period : by selecting date or period based
Then app will automatically calculate the amount and show result