Compound Interest Calculator
Calculate compound interest and see how your investment grows over time.
Results are for illustrative purposes only. Actual investment returns vary and are not guaranteed. Past performance does not predict future results. Consult a financial advisor.
Final Amount
Interest Earned
Total Return
How It Works
Enter the principal amount, annual interest rate, compounding frequency, and time period. The calculator shows your final amount, interest earned, and a year-by-year growth chart.
**Compound Interest Calculator — Harness the Power of Compounding**
Albert Einstein reportedly called compound interest the "eighth wonder of the world." Whether or not he actually said it, the principle is profound: money earning interest on interest can grow exponentially over time. Understanding compound interest is foundational to building wealth.
**What is Compound Interest?**
Compound interest is interest calculated on both the initial principal and all previously accumulated interest. This differs from simple interest, which is calculated only on the principal.
Formula: A = P × (1 + r/n)^(n×t)
Where:
- A = Final amount
- P = Principal
- r = Annual interest rate (decimal)
- n = Number of times interest compounds per year
- t = Time in years
**Compounding Frequencies**
- **Annually** — Interest added once per year.
- **Semi-annually** — Interest added twice per year.
- **Quarterly** — Interest added 4 times per year.
- **Monthly** — Interest added 12 times per year (most common for savings accounts).
- **Daily** — Interest added 365 times per year (maximises compounding effect).
**The Rule of 72**
A quick way to estimate how long it takes to double your money: divide 72 by the annual interest rate. At 8% per year, your investment doubles in approximately 72 ÷ 8 = 9 years.
**Real-World Applications**
*Savings accounts* — Most savings accounts compound monthly or quarterly.
*Fixed deposits* — Banks typically compound annually or quarterly.
*Mutual funds* — Returns compound based on NAV growth.
*Credit card debt* — Compound interest works against you — credit cards compound daily at rates of 30–40%, which is why debt escalates quickly.
**The Impact of Starting Early**
A 25-year-old investing ₹10,000/month at 12% annual return will have approximately ₹3.5 crore at 60. Starting at 35 with the same amount yields only about ₹1 crore. Those 10 extra years nearly triple the outcome — this is the compounding effect in action.