Compound Interest Calculator

What is Compound Interest?

Compound interest is interest earned on both your original amount and the interest already added. The more often it compounds, and the longer you stay invested, the faster the balance grows.

Formula

A = P × (1 + r ÷ n)^{n × t}, where P is the principal, r is the annual rate, n is the number of times interest compounds per year and t is the time in years. Interest earned = A − P.

Worked example

₹1,00,000 at 8% per year compounded annually for 10 years becomes about ₹2,15,892, an interest of ₹1,15,892. With simple interest the same deposit would earn only ₹80,000.

Frequently asked questions

What is the difference between simple and compound interest?

Simple interest is only on the principal. Compound interest is on the principal plus accumulated interest.

Does more frequent compounding matter?

Yes, but the effect is small compared with the rate and the time period.

What is the Rule of 72?

Divide 72 by the annual rate to estimate years needed to double money. At 8%, it takes roughly 9 years.

Does compounding work against me on loans?

Yes. On credit card dues and some loans, unpaid interest is added to what you owe.

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Results are estimates for information only and are not financial, tax or legal advice.