Interest & Basics
Compound Interest
Calculate compound interest
About the Compound Interest calculator
Free Compound Interest Calculator to calculate investment growth with compounding. Understand the power of compound interest for long-term wealth creation. Calculate compound interest with different compounding frequencies and investment periods.
How the maths works
Compound Interest Formula
A = P(1 + R/100)^T- A
- Final amount after compound interest
- P
- Principal amount
- R
- Annual interest rate
- T
- Time period in years
A worked example
Compound Interest Example
| Principal | ₹1,00,000 |
| Interest Rate | 8% per annum |
| Time Period | 10 years |
Final Amount: ₹2,15,892
How to use it
- Enter the principal amount
- Input annual interest rate
- Specify time period
- Choose compounding frequency
- Get final amount and interest earned
What it accounts for
- Calculate compound growth
- Compare different compounding frequencies
- Understand time value of money
- Plan long-term investments
- Visualize growth over time
Why it is worth working out
- Exponential growth over time
- Higher returns than simple interest
- Foundation of investment planning
- Demonstrates patience in investing
Questions people ask
How does compounding actually work?
Interest is added to the principal, and the enlarged principal earns interest in the next period. The formula is A = P(1 + r/n)^(nt), where n is the number of times a year interest is added. The exponent is where the power sits: time does far more work than the amount you start with.
Why does compounding feel slow at first?
Because most of the money arrives at the end. At 12%, money doubles roughly every six years; over thirty years that is five doublings, and the last doubling alone adds as much as the entire first twenty-four years. People give up in the flat part of the curve, which is the only part they ever see if they start late.
Does compounding frequency matter much?
Less than people expect. ₹1 lakh at 8% for ten years becomes ₹2,15,892 compounded annually and ₹2,21,964 compounded quarterly — about 3% more. The rate and the number of years dominate; frequency is a rounding detail by comparison.
What is the rule of 72?
Divide 72 by the annual rate to get the approximate years to double. At 9%, eight years. It holds to within a few percent for rates between about 4% and 15%, which covers almost everything you will be quoted.
Read more on this
- The five years you skip at the start cost more than any five years after — Delaying a SIP by five years does not cost you five years of contributions. It costs you the five most compounded years, which is usually about half the final corpus.
- How compounding actually works (and why the last decade does most of the work) — Compounding is not a steady climb. Most of the money arrives in the final stretch, which is why the starting date matters more than the contribution size.
- The rule of 72, and three other shortcuts worth memorising — Four pieces of arithmetic you can do in your head that replace most of what people reach for a calculator to work out.
This calculator is for information and education. It is not financial advice — see the disclaimer.