Compound Interest Calculator
Calculate compound interest with different compounding frequencies
About Compound Interest Calculator
The Compound Interest Calculator shows how your money grows when interest is earned not only on the principal but also on previously accumulated interest. This is why compounding plays a major role in long-term investing.
Use this calculator to compare the effect of yearly, half-yearly, quarterly, and monthly compounding on your investment value over time.
Formula
CI = A - P
Where:
A = Total amount at maturity
CI = Compound interest earned
P = Principal amount
r = Annual rate of interest (decimal form)
n = Number of times interest is compounded in a year
t = Time period in years
Example
Example: For a principal amount of ₹1,00,000 at 6% annual interest for 5 years with quarterly compounding, the maturity amount is approximately ₹1,34,686. Using the formula, A = 1,00,000 (1 + 0.06 / 4)4 � 5 = ₹1,34,686. Therefore, the compound interest earned is approximately ₹34,686, which matches the calculator result shown above.
Why Compound Interest Matters
Compound interest creates faster growth than simple interest because every compounding period adds new interest on top of the earlier balance. The longer the investment period, the stronger this compounding effect becomes.
Simple vs Compound
Same ₹1,00,000 at 10% for 5 years: Simple interest gives a total of ₹1,50,000, while compound interest gives a higher maturity value because interest is earned on interest as well. This makes compound interest more effective for long-term wealth creation.