Compound Interest Calculator

Compound interest is interest earned on both the original principal and the interest already added — 'interest on interest'. It is the reason long-term investments grow much faster than simple interest would suggest. Banks quote an annual rate, but compounding decides how often that rate is applied — the more often, the faster the balance grows.

Enter values

Results

Final amount: ₹2,15,892.50
Compound interest: ₹1,15,892.50
Principal: ₹1,00,000.00

Principal
Balance

How is the Compound Interest calculated?

Enter the principal amount, the annual interest rate, the compounding frequency (yearly, half-yearly, quarterly or monthly) and the time period. The calculator applies the compound growth formula and returns the final amount and the compound interest earned. Switching the frequency shows how much each extra compounding period adds over the same years.

Formula

A = P × (1 + r ÷ n)^(n × t)

compound interest = A − P

where:
P = principal
r = annual interest rate (as a decimal)
n = compounding periods per year
t = time in years

Example

Principal: ₹1,00,000 · Rate: 8% per year · Compounded yearly · Time: 10 years
A = 1,00,000 × (1 + 0.08)^10 ≈ ₹2,15,892
Compound interest ≈ ₹1,15,892 (simple interest would be only ₹80,000)
Compounded quarterly the same deposit reaches about ₹2,20,804, so the extra frequency adds roughly ₹4,912 across ten years.

Things to remember

The higher the compounding frequency and the longer the time horizon, the greater the gap between compound and simple interest — which is why starting to invest early matters so much.

Frequently Asked Questions

What is compound interest in simple terms?

Compound interest is interest calculated on the initial principal plus all previously accumulated interest. Unlike simple interest, which only pays on the original amount, compound interest makes the balance grow at an accelerating rate.

How often is interest compounded?

It depends on the product. Savings accounts are often compounded daily or monthly, fixed deposits quarterly or half-yearly, and loans typically monthly. More frequent compounding produces a slightly higher effective return.

What is the difference between simple and compound interest?

Simple interest is calculated only on the principal, so it grows linearly. Compound interest is calculated on the principal plus accumulated interest, so it grows exponentially. The longer the period, the bigger the difference.