Compound Interest Calculator
Calculate how your money grows with compound interest. Enter principal, rate, compounding frequency, and time to see final amount, total interest, and year-by-year growth.
Compound Interest Formula
The standard compound interest formula is A = P(1 + r/n)^(nt), where A is the final amount, P is the principal (starting amount), r is the annual interest rate as a decimal (8% = 0.08), n is how many times interest compounds per year, and t is time in years. For monthly contributions, each payment is compounded separately for the remaining time and added to the total.
Compounding Frequency — Annual vs Monthly vs Daily
The more frequently interest compounds, the more you earn. On ₹1,00,000 at 8% for 10 years: annually = ₹2,15,892 (₹1,15,892 interest); quarterly = ₹2,20,804; monthly = ₹2,21,964; daily = ₹2,22,535. The difference between annual and daily is about ₹6,643 — significant on larger amounts and longer time horizons. Indian fixed deposits typically compound quarterly.
The Power of Time — Why Starting Early Matters
At 8% compounded annually: ₹1,00,000 invested for 10 years becomes ₹2,15,892. For 20 years: ₹4,66,096. For 30 years: ₹10,06,266. The final decade produces more growth than the first two decades combined. This exponential curve is why compound interest rewards starting early far more than investing a larger amount later.
Compound Interest vs Simple Interest
Simple interest = P × r × t (interest on principal only). Compound interest earns interest on accumulated interest too. On ₹1,00,000 at 8% for 10 years: simple interest gives ₹80,000 in interest (total ₹1,80,000). Compound interest (annual) gives ₹1,15,892 in interest (total ₹2,15,892) — 44.9% more earnings. The gap widens dramatically over longer periods.
Rule of 72 — How Long to Double Your Money
Divide 72 by the annual interest rate to estimate how long it takes to double your investment. At 6% interest: 72 ÷ 6 = 12 years. At 8%: 9 years. At 12%: 6 years. At 15%: about 4.8 years. This rule assumes annual compounding — more frequent compounding doubles money slightly faster. The calculator above shows the exact doubling time for your inputs.