Compound interest is calculated annually (yearly), semi-annually (twice a year), quarterly (every four months), monthly, etc. All you have to do is divide the rate percent by the time period and ...

For example, you deposit ₹1,00,000 at an annual rate of interest of 5%, compounded annually. At the end of the first year, you will have ₹1,05,000.

Thanks to compound interest, in the second year you’d earn 1 percent on $1,010 — the principal plus the interest, or $10.10 in interest payouts for the year.

Here’s how compound interest works: Principal: The original amount you invest or borrow. Interest Rate: The percentage rate at which your money grows. Compounding Frequency: How often interest ...