Compound Interest Calculator
₹1 lakh at 8% for 10 years grows to about ₹2.21 lakh with quarterly compounding, versus ₹1.80 lakh with simple interest.
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With compound interest, interest is added to the principal and itself earns interest. More frequent compounding means slightly higher returns.
How the compound interest calculation works
A = P × (1 + r/n)^(n × t), where n is the number of compounding periods per year.
Example
₹1,00,000 at 8% for 5 years compounded quarterly grows to about ₹1,48,595, versus ₹1,40,000 with simple interest.
Compound Interest Calculator scenarios
| Compounding | 5 years | 10 years | 20 years |
|---|---|---|---|
| Simple interest | ₹1,40,000 | ₹1,80,000 | ₹2,60,000 |
| Yearly | ₹1,46,933 | ₹2,15,892 | ₹4,66,096 |
| Half-yearly | ₹1,48,024 | ₹2,19,112 | ₹4,80,102 |
| Quarterly | ₹1,48,595 | ₹2,20,804 | ₹4,87,544 |
| Monthly | ₹1,48,985 | ₹2,21,964 | ₹4,92,680 |
What changes the result
- The interest rate — the biggest driver by far.
- Time: compounding adds more in later years than in early ones.
- Compounding frequency: monthly beats yearly, but only slightly at typical rates.
- Tax on interest each year (for FDs), which reduces the amount that compounds.
How to use this calculator
- Enter the principal amount.
- Enter the annual interest rate and the number of years.
- Choose yearly, half-yearly, quarterly or monthly compounding.
- Compare the compound-interest result with simple interest.
Compound Interest Calculator FAQs
Does compounding frequency matter much?
It matters a little: at the same rate, monthly compounding earns slightly more than yearly compounding.
What is the effective annual rate?
The yearly rate after compounding. 8% compounded quarterly is an effective 8.24% a year.
What is the rule of 72?
Divide 72 by the annual rate to estimate the years needed to double your money. At 8%, money roughly doubles in 9 years.
Results are estimates for planning only and are not financial, tax or investment advice. Check figures with your bank, fund house or tax adviser before acting on them.