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Compound Interest Calculator

See how your money grows with compounding — by rate, tenure and frequency.

₹1,00,000

Compound Interest Calculator

Maturity value₹1,46,933
  • Principal₹1,00,000
  • Compound interest₹46,933
  • Maturity value₹1,46,933

Principal vs interest

  • Principal ₹1,00,000
  • Interest ₹46,933

What is compound interest?

Compound interest is interest that earns interest. After each period the interest you have already earned is folded into your principal, and the next period’s interest is calculated on that larger balance. This snowballing is why a sum left untouched for decades can grow to many times its original size — the opposite of simple interest, which only ever pays on the amount you first put in.

Two levers control how fast the snowball grows: the rate, and how often interest is added, called the compounding frequency. This calculator lets you set both, alongside the principal and the number of years.

M = P × (1 + r ÷ n)^(n × t)
where P = principal (the starting amount); r = annual interest rate as a decimal (8% = 0.08); n = number of times interest is compounded per year; t = number of years

Simple vs compound interest

The gap between the two shows up clearly in a worked case. Put ₹1,00,000 at 8% for 5 years. Simple interest pays a flat ₹8,000 a year, ₹40,000 in all, for a total of ₹1,40,000. Compound interest, added yearly, instead pays on a growing balance and delivers ₹1,46,933 — an extra ₹6,933 for doing nothing different. Over longer periods that gap widens sharply.

Simple vs compound: ₹1,00,000 at 8% for 5 years
Simple interest₹1,40,000
Compound (yearly)₹1,46,933
Compounding advantage₹6,933

How compounding frequency changes the result

At the same 8% rate, adding interest more often produces a higher maturity, because each fresh slice of interest starts earning a little sooner. Moving from yearly to monthly compounding on a ₹1,00,000 five-year deposit lifts the result from ₹1,46,933 to ₹1,48,985. The jumps shrink as you go — yearly to quarterly gains more than quarterly to monthly — and beyond a point extra frequency barely registers.

₹1,00,000 at 8% for 5 years, by compounding frequency
Yearly₹1,46,933
Half-yearly₹1,48,024
Quarterly₹1,48,595
Monthly₹1,48,985

The power of compounding over long horizons

Compounding rewards patience more than anything else. The same ₹1,00,000 at 8% roughly doubles to ₹2,15,893 in 10 years, more than quadruples to ₹4,66,096 in 20 years, and crosses ₹10,00,000 by year 30. Most of that final figure is interest earning interest — which is why starting early with a modest sum so often beats investing a larger amount later.

₹1,00,000 at 8%, yearly compounding
After 10 years₹2,15,893
After 20 years₹4,66,096
After 30 years₹10,06,266

Frequently asked questions

What is the formula for compound interest?

The maturity value is M = P × (1 + r/n)^(n×t), where P is the principal, r is the annual rate as a decimal, n is the number of compounding periods per year and t is the number of years. The interest earned is simply M minus P.

How is compound interest different from simple interest?

Simple interest is always calculated on the original principal, so it adds the same amount every year. Compound interest is calculated on the principal plus all interest already accumulated, so the amount added grows each period. Over long horizons compound interest pulls far ahead.

Does compounding more often always give a higher return?

Yes, but with sharply diminishing benefit. Going from yearly to monthly compounding raises the result noticeably, but going from monthly to daily adds only a sliver. The rate and the time invested matter far more than the frequency.

What is continuous compounding?

It is the theoretical limit of compounding at every possible instant, given by M = P × e^(r×t), where e is about 2.718. It produces the highest maturity for a given rate, but the difference from monthly compounding is tiny, so it is mostly used in finance theory rather than everyday deposits.

How can I quickly estimate how long money takes to double?

Use the Rule of 72: divide 72 by the annual rate. At 8%, money doubles in roughly 72 ÷ 8 = 9 years; at 6% it takes about 12 years. It is an approximation, but a handy one for compound growth.

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