Compound Interest Calculator

What is Compound Interest?

Compound interest is the interest calculated on the initial principal and also on the accumulated interest of previous periods. It's often called "interest on interest" and is the key to wealth creation over time. Albert Einstein reportedly called it the "eighth wonder of the world."

Compound Interest Formula

A = P × (1 + r/n)^(n×t), where P = Principal amount, r = Annual interest rate (as decimal), n = Compounding frequency per year, t = Tenure in years. Total Interest = A - P.

Example Calculation

Principal: ₹1,00,000 | Interest Rate: 10% | Tenure: 10 years | Compounding: Quarterly
Future Value: ₹2,59,374 | Total Interest: ₹1,59,374

Compounding Frequency Explained

• Monthly: Interest calculated 12 times per year - highest returns
• Quarterly: 4 times per year
• Semi-Annually: 2 times per year
• Annually: Once per year - lowest returns among these

The Power of Compounding

The longer you stay invested, the more your money grows exponentially. For example, ₹1,00,000 invested at 12% grows to ₹3,10,584 in 10 years, but to ₹9,64,629 in 20 years - more than 3x the 10-year corpus!

Rule of 72

The Rule of 72 is a quick way to estimate how long it takes to double your money. Divide 72 by the annual interest rate. At 12% returns, your money doubles in approximately 6 years (72/12 = 6 years).

Real-life Examples

₹50,000 at 10% for 15 years compounded yearly = ₹2,08,000. Monthly compounding would give ₹2,22,000 – a significant difference of ₹14,000! This calculator helps you see the impact of different compounding frequencies.