Compound Interest Calculator

Calculate compound interest with daily, monthly, quarterly or yearly compounding — free and instant.

Principal

₹1,00,000

Interest Earned

₹46,933

Maturity Amount

₹1,46,933

Formula: A = P × (1 + r/n)n·t — where r is the annual rate as decimal, n is the compounding frequency per year, and t is years.

Advertisement

What is Compound Interest?

Compound interest is interest calculated on the initial principal plus all the accumulated interest from previous periods. It is often called the "eighth wonder of the world" because of how dramatically it can grow your money over time, compared to simple interest which is paid only on the original principal.

Compound Interest Formula

The standard formula used by this calculator is:

A = P × (1 + r/n)n·t

  • A — Maturity amount (principal + interest)
  • P — Principal (initial amount invested)
  • r — Annual interest rate as a decimal (8% = 0.08)
  • n — Compounding frequency per year (1, 2, 4, 12, 365)
  • t — Time period in years

Example Calculation

Invest ₹1,00,000 at 8% annual rate, compounded yearly, for 5 years:

  • A = 1,00,000 × (1 + 0.08/1)1×5 = ₹1,46,933
  • Interest earned = ₹46,933

Switch the same investment to monthly compounding and the maturity grows to ₹1,48,985 — about ₹2,000 more from frequency alone.

Simple vs Compound Interest

On ₹1 lakh at 8% for 10 years: simple interest gives ₹80,000 total interest, while annual compounding gives ₹1,15,892 — over 44% more. The longer the duration, the bigger the gap.

Where Compound Interest Applies

  • Fixed Deposits (FDs) and Recurring Deposits (RDs)
  • PPF, EPF and other long-term savings schemes
  • Mutual funds and SIPs (effective compounding via NAV growth)
  • Savings accounts (usually quarterly compounding)
  • Credit card debt — works against you here

Pair this with our other financial planners:SIP Calculator,FD Calculator,PPF Calculator,Income Tax Calculator, andHRA Calculator.