Investment Return Calculator
Estimate how much your investment will grow over time based on your principal amount, interest rate, time period, and compounding frequency.
Calculate Your Investment Return
How is Investment Return Calculated?
The return on an investment is calculated using compound interest. The formula used is:
Amount = Principal × (1 + (Rate / n)) ^ (n × Time)
Where:
- Principal: The initial investment amount.
- Rate: The annual interest rate (as a percentage).
- n: The number of times the interest is compounded per year.
- Time: The time the money is invested for (in years).
Why is Investment Return Important?
- Assess Investment Performance: It helps you understand how your investment will grow over time.
- Compare Investment Options: Knowing the return helps you compare different investment opportunities.
- Financial Planning: Helps in setting realistic goals for future financial needs.
Example Calculation
Let's assume you invest ₹50,000 at an annual interest rate of 6% for 5 years, compounded quarterly.
Using the formula:
Amount = 50,000 × (1 + (0.06 / 4)) ^ (4 × 5) = ₹67,898.47
The return on investment would be ₹67,898.47 - ₹50,000 = ₹17,898.47