User Guide
- Enter your starting amount, the annual interest rate and the number of years.
- Choose the compounding frequency — yearly, half-yearly, quarterly, monthly or daily (bank FDs typically compound quarterly).
- Optionally add a monthly deposit to model regular saving on top of the lump sum.
- Read the final amount, total interest and the year-by-year table showing exactly how the balance grows.
About the Compound Interest Calculator
Compound interest is interest that earns interest: each period’s interest is added to the balance, and the next period’s interest is calculated on that bigger balance. It’s the mechanism behind every FD, savings account, bond and long-term investment — and the reason starting early matters more than starting big. This calculator shows the exact numbers: final amount, total interest, and a year-by-year table of how your money grows.
A worked example: ₹1,00,000 at 8% for 10 years
With yearly compounding, ₹1,00,000 at 8% becomes ₹1,00,000 × 1.08¹⁰ = ₹2,15,892 — your money more than doubles, and ₹1,15,892 of it is interest. Switch to quarterly compounding (what most banks actually use) and the same deposit reaches ₹2,20,804; monthly compounding gives ₹2,21,964. Same rate, same time — the compounding frequency alone is worth about ₹6,000. That’s the setting most people never check, and it’s why the calculator makes you choose it.
The formula (and the shortcut)
The standard formula is A = P × (1 + r/n)n×t, where P is the principal, r the annual rate, n the compounding periods per year and t the years. The handy mental shortcut is the Rule of 72: divide 72 by the interest rate to estimate doubling time — at 8%, money doubles roughly every 9 years; at 12%, every 6. Check the year-by-year table and you’ll see the rule hold almost exactly.
Why the monthly deposit option changes everything
Most people don’t invest a lump sum once — they save monthly. Add ₹5,000 a month to the example above and the 10-year result grows from ₹2.2 lakh to roughly ₹11.4 lakh, of which ₹7 lakh is your deposits and over ₹4 lakh is interest. The table shows how the early years feel slow and the late years accelerate — the compounding curve every retirement adviser draws, here with your own numbers.
Where to use which tool
This calculator is for understanding growth on any lump sum or savings plan. For bank-specific products, the RD & FD Maturity Calculator mirrors how banks quote deposits; for market investing via monthly SIPs, use the SIP Calculator; for loan EMIs (compounding working against you), the EMI Calculator. Free, instant, and everything runs in your browser.
Frequently Asked Questions
How is compound interest calculated?
A = P × (1 + r/n)^(n×t): principal P grows at rate r, compounded n times a year for t years. Example: ₹1,00,000 at 8% for 10 years, compounded yearly, becomes ₹2,15,892.
What difference does compounding frequency make?
The more often interest is added, the more it earns on itself. ₹1 lakh at 8% for 10 years: ₹2,15,892 yearly, ₹2,20,804 quarterly, ₹2,21,964 monthly — the frequency setting alone is worth thousands.
What is the Rule of 72?
A quick doubling estimate: divide 72 by the annual rate. At 8%, money doubles roughly every 9 years; at 12%, every 6. The year-by-year table in the calculator shows the rule holding.
What is the difference between simple and compound interest?
Simple interest is always calculated on the original principal; compound interest is calculated on principal plus accumulated interest. Over 10 years at 8%, simple interest earns 80% while compound earns ~116%.
Can I include monthly deposits?
Yes — add a monthly deposit and the calculator simulates month-by-month growth, showing invested amount and interest separately in the yearly table.