Compound Interest Calculator
Enter your principal, interest rate, time period, and compounding frequency to see how much your investment grows with compound interest.
How it works
Compound interest adds interest to the growing balance at regular intervals. Unlike simple interest (which always uses the original principal), compound interest applies to an ever-increasing balance. The more frequently compounding occurs — monthly vs annually — the more you earn, because each period's interest starts accruing interest sooner.
Formula
A = P × (1 + r/n)^(n×t)
Each compounding period, interest is added to the principal. That interest then itself earns interest in the next period — creating exponential growth.
| Symbol | Variable | Unit | Description |
|---|---|---|---|
| A | Final amount | ₹ | |
| P | Principal | ₹ | |
| r | Annual interest rate | decimal | |
| n | Compounding frequency | per year | |
| t | Time | years |
Worked example
₹1 lakh at 8% for 5 years (monthly compounding)
- Principal:
- ₹1,00,000
- Rate:
- 8%
- Time:
- 5 years
- Compounding:
- Monthly
r = 8/100 = 0.08, n = 12, t = 5. A = 1,00,000 × (1 + 0.08/12)^(12×5) = 1,00,000 × (1.006667)^60 ≈ 1,00,000 × 1.4898 ≈ ₹1,48,977. Interest earned ≈ ₹48,977.
Limitations
Does not account for taxes on interest income, TDS deductions, or inflation. For recurring deposits, use the SIP calculator instead.
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is always calculated on the original principal. Compound interest is calculated on the principal plus previously earned interest, so your money grows faster over time.
Which compounding frequency gives the best returns?
Higher compounding frequency (daily > monthly > quarterly > annually) gives slightly better returns. However, for most FDs in India, compounding is quarterly, and the difference between quarterly and monthly is small.
What is the Rule of 72?
Divide 72 by the annual interest rate to estimate how many years it takes to double your money. At 8%, money doubles in roughly 72÷8 = 9 years.
Does a bank's stated interest rate include compounding?
Banks state an annual rate, but compounding happens quarterly in most Indian FDs. The effective annual yield (EAY) accounts for compounding and will be slightly higher than the stated rate.
Related calculators
CAGR (Compound Annual Growth Rate) Calculator
Calculate the Compound Annual Growth Rate (CAGR) of your investments, business revenue, or asset portfolios.
Simple Interest Calculator
Calculate simple interest and total amount using SI = P × R × T / 100.
EMI Calculator
Calculate your monthly EMI, total interest, and full amortization schedule for any loan.
SIP Calculator
Calculate the future value of your SIP investments. See total invested, wealth gained, and maturity value.
Percentage Calculator
Calculate X% of Y, what percent X is of Y, or the percent change from X to Y.
Credit Card Payoff Calculator
Find out how many months it will take to pay off your credit card balance and how much total interest you will pay.
Discounted Cash Flow (DCF) Valuation Calculator
Calculate the intrinsic enterprise value of a business, startup, or investment property using Discounted Cash Flow (DCF) and Gordon Growth terminal value.
Dividend Reinvestment (DRIP) Calculator
Simulate the exponential growth of reinvesting dividend payouts into purchasing additional shares over time.
Fixed Deposit (FD) Calculator
Calculate FD maturity amount and total interest earned with standard quarterly compounding for bank and corporate fixed deposits.
Gratuity Calculator
Calculate your statutory gratuity payout and tax-exempt limit under the Payment of Gratuity Act, 1972.
Inflation Calculator
Calculate the future cost of goods and the erosion of purchasing power over time due to inflation.
Loan Prepayment & Extra Payment Calculator
Calculate how much interest and tenure you save on your home loan or personal loan by making extra monthly payments or prepayments.
Recurring Deposit (RD) Calculator
Calculate the maturity value and total interest earned on your monthly Recurring Deposit (RD) with quarterly compounding.
Retirement Corpus Calculator
Calculate the total retirement corpus you need and the monthly SIP savings required today to retire comfortably.
ROI (Return on Investment) Calculator
Calculate return on investment (ROI), net profit, and annualized ROI for any business project or financial investment.
Rule of 72 / 114 / 144 Calculator
Estimate how many years it will take to double (Rule of 72), triple (Rule of 114), or quadruple (Rule of 144) your investment.
SWP (Systematic Withdrawal Plan) Calculator
Calculate monthly income, total withdrawals, and final remaining balance from your mutual fund Systematic Withdrawal Plan (SWP).
Last reviewed: 2026-08-22.