Compound Interest Calculator
Compound interest is interest earned on both your original principal and the interest already added - so your money grows faster the longer it stays invested. This calculator supports any compounding frequency and an optional monthly top-up.
- Invested
- Interest
Year-by-year balance
| Year | Invested | Interest | Balance |
|---|---|---|---|
| 1 | ₹1,00,000 | ₹8,300 | ₹1,08,300 |
| 2 | ₹1,00,000 | ₹17,289 | ₹1,17,289 |
| 3 | ₹1,00,000 | ₹27,024 | ₹1,27,024 |
| 4 | ₹1,00,000 | ₹37,567 | ₹1,37,567 |
| 5 | ₹1,00,000 | ₹48,985 | ₹1,48,985 |
| 6 | ₹1,00,000 | ₹61,350 | ₹1,61,350 |
| 7 | ₹1,00,000 | ₹74,742 | ₹1,74,742 |
| 8 | ₹1,00,000 | ₹89,246 | ₹1,89,246 |
| 9 | ₹1,00,000 | ₹1,04,953 | ₹2,04,953 |
| 10 | ₹1,00,000 | ₹1,21,964 | ₹2,21,964 |
How to calculate compound interest
Each period, interest is calculated on the current balance and added back, so the next period earns interest on a larger base. More frequent compounding (daily vs yearly) and longer time horizons both increase the final amount.
A = P(1 + r/n)^(n·t) + PMT × [ ((1 + i)^(12t) − 1) / i ], where i = (1 + r/n)^(n/12) − 1Example. ₹1,00,000 at 8% compounded monthly for 10 years grows to about ₹2,21,964 - roughly ₹1,21,964 of interest, with no extra contributions.
Why compounding frequency matters
The more often interest is added, the more often it starts earning interest itself. Daily compounding edges out monthly, which edges out annual - though the gap narrows at lower rates. The bigger lever is almost always time: an extra decade invested usually beats a slightly higher compounding frequency.
Frequently asked questions
What's the difference between simple and compound interest?
Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus all previously earned interest, which is why it grows faster over time.
What is the rule of 72?
A quick shortcut: divide 72 by the annual interest rate to estimate the years it takes money to double. At 8%, that's roughly 9 years.
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