It’s not an easy job to earn money but this is also a fact that money grows more money. For example if you put your money in a bank, it increases with the passage of time as the bank pays you fees for using your money and that fees is called interest. When you get a loan from a bank or a mortgage firm, you have to pay more than the principal amount as the fees to use the loan money. This means that bank got more money than the amount it had given to you. If you put your money in a high interest rate bank, you get more money in return as compared to a low interest rate bank. This interest is gained annually and if you add the earned money into the principal amount, the interest grown much faster with every passing year. This type of interest that is calculated on both the principal amount and the previous earned interest is called compound interest. For example if you have earned 10% interest on $1000, it means you have earned $100 additional and if you add the additional amount into the original figure, next year you will earn 10% interest on $1100 and that would be $110 and so on.
Compound interest calculator is a process which enables us to find the interest we will earn in the next years or will pay off over a specific time period. If we want to calculate the compound interest of next five or ten years by hand, it’s not an easy thing to do as it involves number of formulas and complicated mathematic and accounting equations. One can’t do this by his own if he is not an expert of accounting or banking procedures. But this calculator makes it so easy that even a teenager or immature person can calculate the compound interest of his principal amount of the loan he borrowed. We just have to put some figures into the calculator like the principal amount, interest rate, percent yield and time period of the investment and in a few seconds the actual and most accurate results are in front of our eyes and the best part is that it doesn’t need a mathematician or accountant to handle or understand the results.
The first and most important benefit of using a compound interest calculator is that it doesn’t need a professional of banking or accounting to handle the process or read the results but it’s so easy that anyone can do it and finds out the compound interest of his principal amount. This calculator gives the most accurate and actual amounts and eliminated the chances of an error or mistake into the figures which are possible when someone is doing it manually. This process provides us the information about the upcoming years the estimated financial situation of the future so that if it’s good we can reinvest the earned interest otherwise it would be better if we invest that money into some another project.
Here is preview of this Compound Interest Calculator Template,
Uses of compound interest calculators in our daily lives:
- Individuals and non-accountant persons use this calculator before they invest their money into a bank, business or some project to see the earning figures of upcoming years. This way they can decide more effectively if a bank fulfills their expectations or they need to find another one.
- Banks and businesses use this calculator before they loan their money to a borrower to check the amount of extra money that they will get over the next few years.
- Other accounting and financial organizations use this calculator to find out the best investment plans for their company or business.
- Government based financial departments use this calculator to develop or improve new financial and investment strategies for the people and banks.
Here is download link of this Compound Interest Calculator Template,