What is a Compound Interest Calculator?
A compound interest calculator shows how much your money grows when interest is earned on both the principal and the interest already added. Enter the principal, rate, time period and compounding frequency to see the total amount, compound interest earned and the effective annual rate.
Compounding is the engine behind long-term wealth creation — it is why starting to invest early matters so much.
How to use the Compound Interest Calculator
- 1Enter the principal amount.
- 2Enter the annual interest rate.
- 3Enter the time period in years.
- 4Choose how often interest is compounded: yearly, half-yearly, quarterly or monthly.
- 5Compare the result with simple interest shown below the results.
Compound Interest Calculation Formula
- A
- — Final amount
- P
- — Principal
- r
- — Annual interest rate ÷ 100
- n
- — Compounding periods per year
- t
- — Time in years
Example: ₹1 lakh at 10% for 10 years
| Compounded yearly | ₹2,59,374 |
|---|---|
| Compounded quarterly | ₹2,68,506 |
| Compounded monthly | ₹2,70,704 |
| Simple interest (for comparison) | ₹2,00,000 |
Yearly compounding earns ₹59,374 more than simple interest over the same 10 years.
Compound interest vs simple interest
Simple interest is calculated only on the original principal, so it grows in a straight line. Compound interest adds each period's interest to the balance, so the next period's interest is larger. The gap widens dramatically over long periods — which is why patient, long-term investing is so powerful.
The Rule of 72
A quick way to estimate doubling time: divide 72 by the interest rate. At 6% money doubles in about 12 years; at 9%, about 8 years; at 12%, about 6 years.
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Results from this calculator are estimates based on the inputs and assumptions you enter. They are for information and education only and are not financial, tax or investment advice.