Compound Interest Calculator
See how your investment grows over time with the power of compounding. Adjust the frequency and add periodic contributions to maximise your returns.
Final Amount
₹2,15,892.50
Principal Invested
₹1,00,000
Total Interest Earned
₹1,15,893
Tenure
10 years
Growth Over Time
- Principal
- Interest
Year-by-Year Breakdown
| Year | Total Amount | Interest Earned |
|---|---|---|
| 1 | ₹1,08,000 | ₹8,000 |
| 2 | ₹1,16,640 | ₹16,640 |
| 3 | ₹1,25,971 | ₹25,971 |
| 4 | ₹1,36,049 | ₹36,049 |
| 5 | ₹1,46,933 | ₹46,933 |
| 6 | ₹1,58,687 | ₹58,687 |
| 7 | ₹1,71,382 | ₹71,382 |
| 8 | ₹1,85,093 | ₹85,093 |
| 9 | ₹1,99,900 | ₹99,900 |
| 10 | ₹2,15,893 | ₹1,15,893 |
How is Compound Interest Calculated?
Compound interest is calculated on both the initial principal and the accumulated interest from previous periods:
- A = Final Amount
- P = Principal
- r = Annual Interest Rate (as decimal)
- n = Compounding periods per year (monthly=12, quarterly=4, half-yearly=2, annually=1)
- t = Time in years
With a monthly contribution (PMT), the future value of the annuity is added: A = P×(1+r/n)^(n×t) + (PMT×12/n) × ((1+r/n)^(n×t) − 1) / (r/n)
Frequently Asked Questions
What is the difference between simple and compound interest? ▼
Simple interest is calculated only on the principal amount. Compound interest is calculated on the principal plus all previously earned interest, causing your money to grow exponentially over time. The longer the tenure, the greater the difference between the two.
Which compounding frequency gives the highest returns? ▼
More frequent compounding yields slightly higher returns. Monthly compounding gives more than quarterly, which gives more than half-yearly, which gives more than annual. However, the difference is small for typical interest rates — the rate and tenure matter far more.
How does a monthly contribution affect compound interest? ▼
Adding a regular monthly contribution significantly boosts your final corpus. Each contribution itself earns compound interest for the remaining tenure. Even a small monthly addition can make a large difference over long periods due to the compounding effect.
What investments use compound interest in India? ▼
Fixed Deposits (FDs), Recurring Deposits (RDs), Public Provident Fund (PPF), National Savings Certificate (NSC), and most mutual funds use compound interest. FDs typically compound quarterly, while PPF compounds annually. Equity mutual funds compound through reinvested returns.