Simple Interest Calculator

Compound Interest Calculator

Have you got a lot of cash hidden under your mattress or is there a jar of quarters displayed on your shelf? Either way, your extra money could possibly be more constructive and productive by making more money! This is the principle behind the compound interest, your money earns interests, and the interests earned earn interests, and so on… All you have to do is take a trip to your bank and surely, there are several ways that this basic principle of compound interest can help you make more money. Here are some of them:

1. Savings Accounts

Putting your money into a savings account is the simplest and easiest way to save money. If you are below 18 years old, most banks will allow you to open a savings account with any opening amount. However, if you are 18 years old or older, you are likely to be required to maintain a minimum account balance. It is good to start a savings account because your money is accessible anytime; however, savings account does not earn much interest.

1. CDs

If you have money that you won’t need to spend for a few months, you can put it into a CD, otherwise known as certificate of deposit. When you save money in a CD, you are obliged to leave it there for a certain period of time. CDs are great way to save money since they earn more interests than savings accounts do.

What’s the principle behind these? It’s the compound interest that is accrued when you leave your money in any of the financial institutions available in your area. However, not all these financial institutions offer the same compound interest rates. Some even practice unscrupulous activities in declaring the compound interests your account has earned. To stay away from being a victim of this false declaration, you’ve got to learn how to compute your compound interest. The easiest way to compute one is through the use of a compound interest calculator. If you still do not know how, read on.

1. Learn the basic terminologies. Basically, these include the principal, or the initial investment amount, the interest rate or the annual percent of interest earned, and years or the number of years you have invested your money.

2. Find a compound interest calculator online to see the effects of your investment with compound interests.

3. Use the compound interest calculator you found and input the principal on the first line, the interest growth rate on the second line, and the years on the third line.

4. Press the “Calculate” button. The result you will get is the future value (FV) of your investment.

5. You may also calculate the compound interest in different periods such as daily, monthly, annually and quarterly.

It’s easy to calculate compound interest using a compound interest calculator. Try different options and choose one that offers you the highest. This way, you can be certain that your money in the financial institution of your choice is not just sleeping; in fact, it’s working for you.