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Compound Interest Calculator
See how a lump sum grows with compound interest — choose the compounding frequency and watch interest earn interest. ₹, computed live in your browser.
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Quick Answer
Enter a principal, an annual rate, a number of years and how often interest compounds — yearly, quarterly, monthly or daily — and it returns the maturity value and the interest earned using A = P(1 + r/n)^(nt). At ₹1,00,000, 8% for 10 years compounded monthly, it grows to about ₹2,21,964, of which roughly ₹1,21,964 is interest. It calculates live in your browser.
What the Compound Interest Calculator Does
Put in a principal, an annual rate, the number of years, and pick how often interest compounds — yearly, quarterly, monthly (the default) or daily. The tool returns the maturity value, the interest earned, and your original principal, recalculating the moment you change anything. Figures are in rupees.
The engine of it is interest on interest. Unlike simple interest, each period's interest is added to the balance and then itself earns interest, so the total grows exponentially rather than in a straight line — and the more often it compounds, the more you end up with.
How It Works
It applies the standard compound interest formula, A = P(1 + r/n) raised to the power of n times t, where P is the principal, r the annual rate as a decimal, n the number of compounds per year, and t the years.
The maturity value is A, and the interest earned is simply A minus the principal. Changing the frequency changes n — 1 for yearly, 4 for quarterly, 12 for monthly, 365 for daily — which nudges the result up as compounding gets more frequent.
Methodology
- Step 1. Take the principal P, the annual rate r (as a percentage), the years t, and the compounds-per-year n (1, 4, 12 or 365).
- Step 2. Apply A = P × (1 + r/n) to the power of (n × t).
- Step 3. Report the maturity value A and the interest earned, which is A − P.
- Step 4. Recompute live whenever an input changes.
Compound interest
A = P × (1 + r/n)^(n × t)
P = principal, r = annual rate (decimal), n = compounds per year, t = years
Interest earned = A − PWorked examples
₹1,00,000 at 8%, 10 years, compounded monthly (n = 12): A ≈ ₹2,21,964 (interest ≈ ₹1,21,964)Same deposit compounded yearly (n = 1): ₹2,15,893 — less, because it compounds less oftenFrequency matters: the same ₹1,00,000 at 8% over 10 years yields about ₹2,15,893 yearly, ₹2,20,804 quarterly, ₹2,21,964 monthly and ₹2,22,535 daily. The default here is monthly.
Assumptions
- A fixed annual rate for the whole term — real-world rates change.
- A single lump sum, with nothing added or withdrawn along the way (for regular monthly investing, use the SIP calculator).
- Interest is reinvested at the same rate each period — that's what makes it compound.
- The figure is gross: no tax on interest, fees or inflation is deducted.
Technical Details
| Inputs | Principal, annual rate %, years, frequency |
|---|---|
| Frequencies | Yearly, quarterly, monthly (default), daily |
| Outputs | Maturity value, interest earned, principal |
| Currency | Rupees (₹) |
| Formula | A = P(1 + r/n)^(nt) |
| Where it runs | In your browser, live |
Standards & references
- A = P(1 + r/n)^(nt) — the standard compound interest formula, accounting for interest on both the principal and the accumulated interest.
- Compounding frequency (n) — yearly (1), quarterly (4), monthly (12) or daily (365) — a higher n gives a slightly higher maturity value.
- Rule of 72 — a quick mental check: money roughly doubles in 72 ÷ rate years, so about 9 years at 8%.
Accuracy & Limitations
It assumes a constant rate and full reinvestment. A real account whose rate changes, or that you withdraw from, will end up different.
The result is gross — tax on the interest, account fees and inflation are not deducted, so your real, spendable gain is lower.
Daily compounding uses n = 365; it doesn't model leap years or the 360-day convention some institutions use.
For a recurring monthly contribution rather than a one-time deposit, this is the wrong tool — use the SIP calculator for investments or the RD calculator for bank deposits.
Real-World Use Cases
Project a lump sum
See what a one-time deposit could grow to over a chosen term.
Compare frequencies
Check how yearly, quarterly, monthly or daily compounding changes the outcome.
Long-term savings
Estimate how an investment compounds over many years.
Understand compounding
Watch interest-on-interest pull ahead of flat interest.
When to use it — and when not to
Good for
- Growth of a one-time lump sum
- Comparing compounding frequencies
- Long-term savings projections
- Learning how compounding works
Not the best choice for
- Regular monthly contributions
- Loans and EMIs
- After-tax or inflation-adjusted figures
Investing a fixed amount every month? Use the SIP calculator. A bank fixed deposit? The FD calculator uses quarterly compounding. Borrowing money? Use the loan or EMI calculator.
Frequently Asked Questions
What is the compound interest formula?
A = P(1 + r/n) to the power of (n × t): P is the principal, r the annual rate as a decimal, n the compounds per year, and t the years. The interest earned is A minus P.
How does compounding frequency change the result?
More frequent compounding earns slightly more, because interest is added to the balance sooner and then itself earns interest. On ₹1,00,000 at 8% over 10 years the maturity rises from about ₹2,15,893 yearly to ₹2,22,535 daily.
How is compound interest different from simple interest?
Simple interest is charged only on the original principal, so it grows in a straight line. Compound interest is charged on the principal plus accrued interest, so it grows exponentially and pulls ahead over time.
Which frequency should I choose?
Match it to your account: savings often compound daily or monthly, while many fixed deposits compound quarterly. The tool defaults to monthly.
Does it deduct tax?
No. The maturity shown is gross. Interest is usually taxable, so your real return after tax (and any fees) is lower.
Can I use it for a monthly investment?
No — this is for a single lump sum. For a fixed amount invested every month, use the SIP calculator, which models recurring contributions.
What is the rule of 72?
A shortcut for how long money takes to double: divide 72 by the rate. At 8%, that's about 9 years — and the calculator confirms a lump sum roughly doubles over that span.
Does daily compounding handle leap years?
It uses 365 days a year for simplicity, so it doesn't adjust for leap years or the 360-day basis some institutions apply.
Is the interest rate fixed?
Yes — the calculation assumes one constant rate for the whole term. If your real rate changes, the actual result will differ.
What about continuous compounding?
That's the theoretical limit, A = P times e to the power of (r × t). This tool offers yearly up to daily rather than continuous, which is close to the daily figure anyway.
Why does my bank fixed deposit show a different number?
Indian banks usually compound FDs quarterly, and deduct tax. Use the FD calculator, which fixes quarterly compounding, for a closer match.
What currency does it use?
It shows rupees, but the maths is currency-agnostic — the same percentages and periods apply to any currency.
References
Uses the standard A = P(1 + r/n)^(nt) with the compounding frequency you choose (monthly by default) — a gross figure that assumes a fixed rate and full reinvestment, before any tax or inflation.
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