Compound Interest Calculator
See how a lump sum grows over time as interest compounds — annually, quarterly, monthly, or daily.
- Free, updates instantly as you type
- Any compounding frequency
Assumes a fixed interest rate for the whole period and no withdrawals or additional deposits.
Frequently asked questions
How is compound interest calculated?
A = P × (1 + r/n)n×t, where P is the principal, r is the annual interest rate, n is how many times per year it compounds, and t is the number of years.
Why does compounding frequency matter?
More frequent compounding (e.g. monthly vs. annually) earns slightly more interest for the same nominal rate, since interest starts earning its own interest sooner.
Does this account for taxes on interest?
No — this shows gross interest earned before any tax. Actual take-home returns will typically be lower once tax is applied.
Is compound interest always good?
It works for you when you save or invest, and against you when you borrow. Credit-card balances and long loans compound too, which is why unpaid debt grows quickly.
Why does starting early matter so much?
Because time is the biggest lever. Money invested for 20 years has a second decade in which it earns interest on all the interest from the first. Starting ten years later can leave you with far less even if you save more each month.
What compounding frequency should I choose?
Use the one your bank or product states. Savings accounts and fixed deposits commonly state it in their terms; if you're not sure, quarterly is a common default.
How compound interest works
Simple interest is paid only on the money you started with. Compound interest is paid on your money and on the interest it has already earned, so each period's interest is calculated on a bigger balance than the last. The calculator uses A = P × (1 + r/n)n×t, where P is the principal, r the annual rate, n how many times a year interest is added, and t the number of years.
A worked example
₹1,00,000 at 8% a year for 10 years, with different compounding frequencies:
| Compounded | Value after 10 years | Interest earned |
|---|---|---|
| Annually | ₹2,15,892 | ₹1,15,892 |
| Quarterly | ₹2,20,804 | ₹1,20,804 |
| Monthly | ₹2,21,964 | ₹1,21,964 |
| Daily | ₹2,22,535 | ₹1,22,535 |
More frequent compounding helps, but with sharply diminishing returns: moving from annual to quarterly adds about ₹4,900, while moving from monthly to daily adds only about ₹570. The rate and the time matter far more than the compounding frequency.
Time is where compounding really shows. Leave the same ₹1,00,000 at 8% (compounded quarterly) for 20 years and it grows to about ₹4,87,500, more than double the 10-year result of ₹2,20,804. The second decade earns far more than the first, because the interest from the first decade is now earning interest too.
The Rule of 72
A quick way to estimate how long money takes to double: divide 72 by the annual rate. At 8%, 72 ÷ 8 = 9 years. (With annual compounding the exact figure is about 9.006 years, so the shortcut is very close.) At 6% it's about 12 years; at 12% about 6.
What this calculator assumes
- A fixed rate for the whole period, with no deposits or withdrawals along the way. If you invest regularly, use the SIP Calculator instead.
- Figures are before tax and before inflation. After inflation, the real growth in what your money can buy is smaller than the number shown.
- Real investments rarely earn a constant rate. Use this to understand how growth works and to compare options, not as a promise.
Related calculators
- SIP Calculator — regular monthly investing
- EMI Calculator — the same effect, working against you on a loan
- All calculators —