Compound Interest Calculator

Compound interest is interest calculated on both your original principal and the interest already earned — the mechanism behind nearly all long-term wealth building, from fixed deposits to equity returns. Where simple interest grows your money in a straight line, compounding curves upward: the growth itself starts growing. This calculator shows the effect precisely for any principal, rate, period and compounding frequency.

The formula is A = P × (1 + r/m)^(m×t), where P is the principal, r the annual rate, m the number of compounding periods per year and t the time in years. Frequency matters: ₹1 lakh at 8% for 10 years becomes ₹2.16 lakh compounded yearly, but ₹2.22 lakh compounded monthly. The more often interest is credited, the earlier it starts earning its own interest.

Two practical uses. First, comparing products: banks quote nominal rates with different compounding — converting them to maturity values makes offers directly comparable. Second, appreciating time: at 8%, money doubles roughly every 9 years (the rule of 72 — divide 72 by the rate). Starting ten years earlier doesn't add a little, it roughly doubles the outcome. Play with the time field and watch how disproportionately the final amount responds — that's the argument for starting to invest now rather than at a 'better' time.