Compound interest calculator
See how compounding grows a lump sum. Enter the principal, rate and period to get the total value and interest earned - with yearly, quarterly or monthly compounding.
Details
Tweak the numbers - results update live
₹1L
Principal
amount invested
₹61.05K
Interest
earned
1.61×
Growth
value ÷ principal
How it grows
Principal vs total value, year by year
Principal vs interest
What you put in vs what it earns
- Principal₹1L
- Interest₹61.05K
Total value
₹1,61,051
The eighth wonder
Interest on interest
Compounding is the engine behind almost all long-term wealth. Each period’s interest joins the principal, so the base keeps growing and the curve bends upward - gently at first, then steeply.
A = P × (1 + r/n)n × t
- 1
Start with principal
P is your initial amount. Everything grows from here.
- 2
Earn each period
Interest is added every compounding period - yearly, quarterly or monthly.
- 3
Compound the base
Next period earns on principal plus all prior interest.
- 4
Time does the work
The longer the horizon, the more dramatic the final curve.
Questions
Frequently asked
Compound interest is interest earned on both your original principal and the interest already accumulated. Unlike simple interest, which is paid only on the principal, compounding lets your money grow faster over time because each period’s interest is added to the base on which the next period’s interest is calculated.
The formula is A = P × (1 + r/n)^(n×t), where P is the principal, r is the annual rate (as a decimal), n is the number of times interest compounds per year, and t is the number of years. The interest earned is A − P. This calculator lets you pick yearly, quarterly or monthly compounding.
Simple interest is a flat percentage of the principal each year, so ₹1 lakh at 10% earns ₹10,000 every year. Compound interest earns on the growing balance, so the same deposit earns more each year. Over 5 years at 10%, simple interest gives ₹50,000 but annual compounding gives ₹61,051 - the difference grows with time and rate.
Yes, slightly. Monthly compounding earns a little more than quarterly, which earns more than yearly, at the same nominal rate, because interest is added to the base more often. The effect is modest at typical rates but adds up over long periods. Switch the frequency in the calculator to compare.
Most savings instruments compound: fixed deposits (quarterly), PPF and EPF (yearly), and mutual-fund returns (continuously, in effect). Loans also compound against you. Understanding compounding helps you both grow savings and minimise borrowing costs.