Compound Interest Calculator

Calculating compound interest takes less than a minute:

1. Enter the principal amount you want to invest.
2. Enter the annual interest rate offered by your bank or investment.
3. Select the investment tenure in years.
4. Choose the compounding frequency — annually, semi-annually, quarterly, or monthly.
5. Click Calculate to instantly see your maturity amount and total interest earned.

The calculator also shows a year-by-year breakdown of how your investment grows over time.

Compound interest is the interest calculated not just on your original principal, but also on the accumulated interest from previous periods. This means your money grows faster over time compared to simple interest, where interest is calculated only on the principal amount.

The more frequently interest is compounded — monthly instead of annually, for example — the faster your investment grows, since interest starts earning interest sooner.

Compound interest is calculated using the following formula:

A = P (1 + r/n)^(n×t)

Where:

• A = Final amount (principal + interest)
• P = Principal amount
• r = Annual interest rate (in decimal form)
• n = Number of times interest is compounded per year
• t = Time period in years

For example, if you invest ₹1,00,000 at an annual interest rate of 8%, compounded annually, for 10 years, your investment would grow to approximately ₹2,15,892.

The key difference between compound and simple interest lies in how interest is calculated:

• Simple Interest — Calculated only on the original principal amount throughout the investment period. Growth is linear.
• Compound Interest — Calculated on the principal plus any interest already earned. Growth is exponential, especially over longer periods.

Over short tenures, the difference between the two is small. But over 10, 20, or 30 years, compound interest can result in significantly higher returns — this is often referred to as the "power of compounding."

Several factors determine how much your investment will grow:

1. Principal Amount — A higher initial investment results in higher absolute returns.
2. Interest Rate — Even a small difference in rate compounds significantly over long periods.
3. Tenure — The longer you stay invested, the more pronounced the compounding effect becomes.
4. Compounding Frequency — Monthly or quarterly compounding yields slightly higher returns than annual compounding, for the same interest rate.

Our calculator helps you plan your investments smartly by allowing you to:

• Get instant, accurate compound interest calculations
• Compare returns across different tenures and compounding frequencies
• Understand exactly how much your investment will grow over time
• Make informed decisions about where and how long to invest