Compound Interest Calculator
With compound interest you earn interest on your interest. Enter your principal, rate, time and how often interest is added to see the maturity amount, the interest earned and the effective annual rate.
Estimates for general information. This is not financial advice.
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From related categoriesHow to use this calculator
- Enter the principal.
- Enter the annual rate and the time in years.
- Pick how often interest is compounded.
- Read the maturity amount, interest earned and effective annual rate.
The formula
Worked example
₹1,00,000 at 10% for 5 years: with yearly compounding A = 1,00,000 × 1.1^5 = about ₹1,61,051. With monthly compounding the amount is about ₹1,64,531, because interest is added more often.
Understanding your result
The more often interest is compounded, the higher the final amount, but the gain shrinks as frequency rises. Time matters more than frequency: the longer money stays invested, the faster the growth.
When to use it
- Estimate the maturity value of a fixed deposit.
- See how much more monthly compounding earns than yearly.
- Understand why starting to save early matters.
In-depth guide
How compounding grows money
With compound interest, the interest you earn is added to the principal, and the next interest is calculated on the larger amount. The table shows ₹1,00,000 growing at 8% a year, compounded yearly, next to what simple interest would give on the same amount.
| Years | Compound amount | Simple interest amount |
|---|---|---|
| 5 | ₹1,46,933 | ₹1,40,000 |
| 10 | ₹2,15,892 | ₹1,80,000 |
| 15 | ₹3,17,217 | ₹2,20,000 |
| 20 | ₹4,66,096 | ₹2,60,000 |
| 25 | ₹6,84,848 | ₹3,00,000 |
| 30 | ₹10,06,266 | ₹3,40,000 |
After 5 years the gap is small. After 30 years the compound amount is more than three times the simple-interest amount. The longer the time, the more compounding matters.
How compounding frequency changes the result
Interest can be added yearly, half-yearly, quarterly, monthly or daily. More frequent compounding gives a slightly higher amount for the same stated rate. The table uses ₹1,00,000 at 10% for 5 years.
| Compounded | Times a year | Amount after 5 years | Effective annual rate |
|---|---|---|---|
| Yearly | 1 | ₹1,61,051 | 10.00% |
| Half-yearly | 2 | ₹1,62,889 | 10.25% |
| Quarterly | 4 | ₹1,63,862 | 10.38% |
| Monthly | 12 | ₹1,64,531 | 10.47% |
| Daily | 365 | ₹1,64,861 | 10.52% |
The effective annual rate is the number to compare when two products quote the same rate but compound differently.
The rule of 72
A quick way to estimate how long money takes to double is to divide 72 by the yearly rate. The table compares the shortcut with the exact figure.
| Rate a year | Rule of 72 | Exact doubling time |
|---|---|---|
| 4% | 18.0 years | 17.7 years |
| 6% | 12.0 years | 11.9 years |
| 8% | 9.0 years | 9.0 years |
| 10% | 7.2 years | 7.3 years |
| 12% | 6.0 years | 6.1 years |
The shortcut is close for ordinary rates and is handy for a quick mental check.
Where compounding works for you and against you
- It works for you in savings, fixed deposits, recurring deposits and long-term investments.
- It works against you in credit card dues and other loans where unpaid interest is added to the balance.
- Starting early and leaving the money untouched matter more than the exact rate.
Limits of this calculation
The calculator assumes one fixed rate and no deposits or withdrawals. Real products may change their rate, charge fees or use their own day-count rules. For monthly deposits use the SIP or Recurring Deposit calculators.
Assumptions and limits
Assumes a fixed rate and no deposits or withdrawals during the period. Taxes and inflation are not included. Banks may use different day-count rules.
Frequently asked questions
What is compounding frequency?
How often interest is added to the balance, such as yearly, quarterly or monthly.
What is the effective annual rate?
The yearly growth rate after compounding is taken into account. It is higher than the stated rate when compounding is more than once a year.
Is this the same as an FD maturity amount?
Often close, but each bank has its own compounding and rounding rules, so check your FD terms.
Does it include taxes?
No. Interest may be taxable, so your actual return can be lower.
Can I add monthly deposits?
Not here. Use the SIP calculator for regular monthly investments.