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Compound Interest Calculator

₹
%
Years
Maturity Value₹1,48,985

Principal

₹1,00,000

Interest Earned

₹48,985

Maturity

₹1,48,985

Compound Interest Calculator — Overview

A Compound Interest Calculator helps you estimate how your money grows over time when the interest earned is reinvested and added to the principal. Unlike simple interest, compound interest earns "interest on interest," which leads to exponential growth over longer periods.

This calculator supports multiple compounding frequencies including monthly, quarterly, half-yearly, and annually, giving you a precise estimate of your maturity amount and total interest earned.

How is it calculated?

The compound interest formula is:

A = P x (1 + r/n)^(n x t)


Where A = maturity amount, P = principal, r = annual interest rate (decimal), n = compounding frequency per year, and t = time in years.


Enter your principal amount, annual interest rate, investment period, and select the compounding frequency. The calculator will show you the maturity amount and total interest earned.

Frequently Asked Questions

Simple interest is calculated only on the original principal, so the interest amount stays the same each year. Compound interest is calculated on the principal plus all accumulated interest, so your earnings grow faster over time.

More frequent compounding yields higher returns. Monthly compounding gives better results than quarterly, which is better than half-yearly, which is better than annual. However, the difference becomes marginal at very high frequencies.

Compound interest creates exponential growth over time. For example, Rs 1,00,000 at 10% annual compounding grows to Rs 2,59,374 in 10 years and Rs 6,72,750 in 20 years. The longer your money compounds, the faster it grows.

For investments, compound interest is better because your returns are reinvested. For loans, compound interest means you pay more total interest. Understanding the difference is important when choosing financial products.

The Rule of 72 is a quick way to estimate how long it takes for your money to double with compound interest. Divide 72 by the annual interest rate to get the approximate number of years. For example, at 8% interest, your money doubles in about 9 years (72/8).

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