Compound Interest Calculator
Calculate how your investments can grow over time with the power of compound interest. See the effect of different compounding frequencies on your returns.
Adjust Your Investment Details
Principal Amount
₹1,00,000
₹
Initial investment amount (₹1,000 to ₹1 Crore)
Annual Interest Rate
8%
%
Expected annual rate of return (1% to 30%)
Time Period
10 years
years
Investment duration (1 to 40 years)
Compounding Frequency
Annually
How often interest is compounded per year
Monthly Contribution (Optional)
₹0
₹
Additional monthly investment (₹0 to ₹1,00,000)
Total Future Value
₹2,15,892
Total Investment
₹1,00,000
₹1,15,892
Interest Earned
8.24%
Effective Annual Rate
Annual Breakdown
| Year | Principal | Interest | Total Value |
|---|
About Compound Interest
Compound interest is the interest calculated on the initial principal and also on the accumulated interest of previous periods. It's often referred to as "interest on interest" and can cause wealth to grow exponentially over time.
Compound Interest Formula
A = P (1 + r/n)nt
Where:
- A = Final amount (principal + interest)
- P = Principal amount (initial investment)
- r = Annual interest rate (decimal)
- n = Number of times interest is compounded per year
- t = Time in years
Examples of Compound Interest
Fixed Deposits
Bank FDs typically compound quarterly, helping your savings grow faster than simple interest.
Mutual Funds
Equity mutual funds benefit from compounding as returns generate more returns over time.
PPF Accounts
Public Provident Fund compounds annually, offering tax-free compounded returns.
The Power of Compounding
- Time is Your Greatest Asset: The longer you stay invested, the more powerful compounding becomes.
- Frequency Matters: More frequent compounding (monthly vs annually) yields higher returns.
- Start Early: Even small amounts can grow significantly over long periods due to compounding.
- Reinvestment is Key: Always reinvest your returns to maximize compounding effects.
Compound vs Simple Interest
| Aspect | Simple Interest | Compound Interest |
|---|---|---|
| Interest Calculation | Only on principal | On principal + accumulated interest |
| Growth Pattern | Linear growth | Exponential growth |
| Long-term Returns | Lower | Significantly higher |
| Common Use | Short-term loans | Long-term investments |
Note: This calculator provides estimates based on the inputs provided. Actual returns may vary based on market conditions, fees, and taxes. Past performance is not indicative of future results. Consider consulting with a financial advisor for personalized advice.