Calculate compound interest and see the power of compounding with different frequencies.
A Compound Interest calculator is a free online tool that helps you calculate interest when it compounds at regular intervals. By entering principal, rate, time, and compounding frequency, you can see exponential investment growth over time.
Compound Interest is interest calculated on both the initial principal and accumulated interest from previous periods. Unlike simple interest (calculated only on principal), compound interest creates "interest on interest," leading to exponential growth. This is the foundation of wealth creation and long-term investing.
A compound interest calculator empowers you to:
Compound Interest formula:
A = P(1 + r/n)nt
Where:
Example: ₹1,00,000 at 10% for 5 years, quarterly:
Compound interest earns interest on both principal and accumulated interest. Example: ₹10,000 at 10% yearly. Year 1: ₹1,000 interest (total ₹11,000). Year 2: 10% on ₹11,000 = ₹1,100 (total ₹12,100). Year 3: ₹1,210 (total ₹13,310). After 5 years: ₹16,105 vs ₹15,000 simple interest—extra ₹1,105 from compounding!
Rule of 72: Years to double = 72 ÷ Interest Rate. At 8%, money doubles in 9 years (72÷8). At 12%, doubles in 6 years. At 6%, takes 12 years. Quick mental math for compound interest doubling time.
More frequent = better returns. ₹1L at 10% for 5 years: Yearly: ₹1,61,051. Quarterly: ₹1,63,862. Monthly: ₹1,64,531. Daily: ₹1,64,866. Difference between yearly and daily: ₹3,815. Daily compounding is best, but monthly/quarterly also excellent. Most banks use quarterly for FDs.
