# Compound Interest Calculator Online

## What is Compound Interest?

Compound interest is the interest on interest. In simple terms, the addition of interest to the principal sum of the loan or deposit is called compound interest. If you have an investment account, you earn money on your interest. The interest that you earn is reinvested, instead of paying it out. If you are repaying a loan that charges compound interest, you are paying interest on the interest. If you earn compound interest on your investment, it grows without any further deposits. You may increase the deposits to raise the efficacy of the compound interest.

## What is a compound interest calculator?

A compound interest calculator is a simulation, that shows how investments grow with time. You need three parts to calculate the compound interest that is the principal amount, interest rate, and time for which the money is invested. The compound interest calculator consists of a formula box, where you enter the compounding frequency, principal amount, rate of interest, and the period. The calculator will show you the future value of your investments.

## How to use the ClearTax Compound Interest Calculator?

The ClearTax Compound Interest Calculator shows you the compound interest you have earned on any deposits.

To use the compound interest calculator:

• You must enter the interest type as compound interest.
• You select the compounding frequency as daily, weekly, quarterly, semi-annually, or annually.
• You must enter the principal amount.
• You then choose the rate of interest and the period in days, weeks, months, quarters, or years.
• The ClearTax Compound Interest Calculator will show you the compound interest you have earned on the deposit.

## Benefits of ClearTax Compound Interest Calculator

• The ClearTax Compound Interest Calculator is easy to use and shows the compound interest on deposits in seconds.
• The calculator helps you set and achieve financial goals. You get to know the interest amount you earn on the deposits.
• You may use the calculator to check multiple scenarios. You must tweak the interest rates, investment duration and the investment amount to compare the return from various investments.

## FAQs on the ClearTax Compound Interest Calculator

• Why does the ClearTax Compound Interest Calculator ask you to choose the frequency of compounding?
The ClearTax Compound Interest Calculator asks you to fill the compounding frequency from the daily, weekly, monthly, quarterly and other options. Quarterly compounding means interest is calculated and paid every three months. The ClearTax Compound Interest Calculator wants to know how often interest is added to your loans each year.
• Is ClearTax Compound Interest Calculator easy to use?
You can use the ClearTax Compound Interest Calculator from the comfort of your home. It is an easy to use tool where you enter the compounding frequency, principal amount, interest rate and the period. The ClearTax Compound Interest Calculator shows the interest you earn on the deposit in seconds.
• How does ClearTax Compound Interest Calculator help you to choose an investment?
The ClearTax Compound Interest Calculator shows you the compound interest that you earn on investments. It helps you to select the financial instruments that offer a higher interest rate based on your investment goals and risk tolerance.
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