CompoundInterest
Definition
Interest calculated on both the initial principal and the accumulated interest from previous periods. Compounding accelerates wealth growth over time, making it one of the most powerful concepts in investing. The frequency of compounding (daily, monthly, annually) affects the total returns.
Example
Rs 1 lakh invested at 12% compounded annually becomes approximately Rs 1.76 lakh in 5 years, compared to Rs 1.60 lakh with simple interest.
Related Calculators
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