Compound Interest Calculator
Calculate the future value of your investment with compound interest
Investment Details
How Compound Interest Works?
Compound interest is the interest calculated on the initial principal and also on the accumulated interest from previous periods. This "interest on interest" effect makes your money grow exponentially over time.
Compound Interest Formula/Equation
A = P(1 + r/n)^(nt)
Where:
- A = Final amount
- P = Principal amount
- r = Annual interest rate (as decimal)
- n = Compounding frequency per year
- t = Time in years
Example:
Let's say you invest ₹1,00,000 at an annual interest rate of 10% compounded annually for 3 years.
Given: P = ₹1,00,000, r = 10% = 0.10, n = 1 (annually), t = 3 years
Step 1: Apply the Compound Interest Formula
A = P(1 + r/n)^(nt)
A = ₹1,00,000 × (1 + 0.10/1)^(1 × 3)
A = ₹1,00,000 × (1.10)^3
A = ₹1,00,000 × 1.331
A = ₹1,33,100
Step 2: Calculate Interest Earned
Interest = A - P
Interest = ₹1,33,100 - ₹1,00,000
Interest = ₹33,100
Result: Your investment grows to ₹1,33,100, earning ₹33,100 in interest over 3 years.
Note: With simple interest, you would earn only ₹30,000. Compound interest gives you ₹3,100 more due to "interest on interest"!
Key Benefits:
- Exponential growth of wealth over time
- Works for savings accounts, FDs, and investments
- Higher frequency compounding (daily) yields more returns
- Time is your greatest ally in compounding
- Universal formula used by banks worldwide
Compounding Frequencies Explained
Daily Compounding
Interest calculated daily (n=365). Highest returns, common in savings accounts.
Monthly Compounding
Interest calculated monthly (n=12). Common in many investment products.
Quarterly Compounding
Interest calculated quarterly (n=4). Used in some fixed deposits.
Yearly Compounding
Interest calculated annually (n=1). Simplest form, lower returns.
What Can You Calculate?
Savings Accounts
Calculate returns on savings with daily compounding
Fixed Deposits
Estimate maturity amount for FDs and term deposits
Investment Returns
Project future value of lump sum investments
Goal Planning
Plan how much to invest to reach financial goals
Why Use Our Compound Interest Calculator?
Multiple compounding frequencies
Accurate bank-standard calculations
Yearly breakdown visualization
100% free, no registration
Mobile-friendly design
Works globally for all currencies
Compound Interest Calculator FAQs
❓What is compound interest?
Compound interest is interest calculated on both the principal amount and accumulated interest from previous periods, leading to exponential growth over time.
❓How does compounding frequency affect returns?
More frequent compounding (daily vs yearly) results in higher returns because interest is calculated and added more often, allowing interest to earn interest sooner.
❓Is this calculator accurate?
Yes, our calculator uses the standard compound interest formula used by banks and financial institutions worldwide.
❓Can I use this for different currencies?
Yes, the calculator works with any currency. Simply enter amounts in your local currency and the calculations remain accurate.
❓Is this calculator free?
Yes, our compound interest calculator is completely free to use with no signup or registration required.