Calculate the power of compounding on your investments. Add monthly contributions, choose compounding frequency, and see your wealth grow.
Add regular monthly investments to boost your corpus
17/4/2026
Total Invested
₹1,00,000
Total Interest
₹1,59,374
Maturity Value
₹2,59,374
| Year | Invested (₹) | Interest Earned (₹) | Balance (₹) |
|---|---|---|---|
| 1 | ₹1,00,000 | ₹10,000 | ₹1,10,000 |
| 2 | ₹1,00,000 | ₹21,000 | ₹1,21,000 |
| 3 | ₹1,00,000 | ₹33,100 | ₹1,33,100 |
| 4 | ₹1,00,000 | ₹46,410 | ₹1,46,410 |
| 5 | ₹1,00,000 | ₹61,051 | ₹1,61,051 |
| 6 | ₹1,00,000 | ₹77,156 | ₹1,77,156 |
| 7 | ₹1,00,000 | ₹94,872 | ₹1,94,872 |
| 8 | ₹1,00,000 | ₹1,14,359 | ₹2,14,359 |
| 9 | ₹1,00,000 | ₹1,35,795 | ₹2,35,795 |
| 10 | ₹1,00,000 | ₹1,59,374 | ₹2,59,374 |
Formula Used:
A = P (1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) - 1) / (r/n)]Where P = principal, r = annual rate, n = compounding frequency, t = years, PMT = monthly contribution.
Compound interest is the process where interest earned on an investment is reinvested to generate additional interest over time. Unlike simple interest, which is calculated only on the principal, compound interest accelerates wealth creation exponentially. Our Compound Interest Calculator allows you to simulate different scenarios – principal amount, interest rate, tenure, compounding frequency, and monthly contributions – to see the magic of compounding in action.
In this comprehensive guide, we'll explore the mathematics of compound interest, its applications in savings accounts, fixed deposits, mutual funds, and loans. We'll compare different compounding frequencies, discuss the Rule of 72, and answer frequently asked questions about compounding.
Compound interest is interest calculated on the initial principal plus all accumulated interest from previous periods. It's often called "interest on interest." For example, ₹1,00,000 at 10% per annum compounded annually becomes ₹1,10,000 after year 1, ₹1,21,000 after year 2, and ₹1,33,100 after year 3. The growth accelerates because each year's interest earns interest in subsequent years.
A = P (1 + r/n)^(nt)
Where:
A = Final amount
P = Principal (initial investment)
r = Annual interest rate (in decimal)
n = Number of times interest compounds per year
t = Number of years
With monthly contributions: A = P(1+r/n)^(nt) + PMT × [((1+r/n)^(nt) - 1) / (r/n)]
Our calculator handles both scenarios.
The more frequently interest compounds, the higher the effective annual return. For a 10% annual rate:
The Rule of 72 is a quick way to estimate how long it takes for an investment to double. Divide 72 by the annual interest rate. For example, at 12% CAGR, money doubles in 72/12 = 6 years. At 8%, it takes 9 years. This rule works well for rates between 6-15%. Use our calculator to verify.
Compare two investors: Investor A starts at age 25, invests ₹50,000 annually for 10 years (total ₹5 lakhs), then stops. Investor B starts at age 35, invests ₹50,000 annually for 30 years (total ₹15 lakhs). Assuming 12% CAGR, at age 65:
Investor A: ₹50,000 × [((1.12)^10 - 1)/0.12] × (1.12)^30 = ~₹2.5 crores
Investor B: ₹50,000 × [((1.12)^30 - 1)/0.12] = ~₹1.2 crores
Starting early matters more than investing more. Use our calculator to see for yourself.
Simple interest is calculated only on principal. Compound interest is calculated on principal + accumulated interest, leading to exponential growth.
Adding regular contributions significantly boosts returns, especially over long periods. Our calculator shows the combined effect.
For savings and investments, yes. For loans (credit cards), compound interest is detrimental – pay off quickly.
Yes, set monthly contribution as your SIP amount, and expected annual return as the rate. Our SIP calculator is more precise for varying returns.
It uses exact financial formulas. Results are mathematically accurate for given inputs.
For safe instruments (FD): 7-9%. For equity: 12-15% historical. For aggressive goals: 15-18% possible but higher risk.
Click the "Download PDF Report" button. The PDF includes all inputs, outputs, charts, and year-by-year table.
More frequent compounding means interest is added to principal sooner, so subsequent interest calculations include more base amount.
Example 1 – FD: ₹5,00,000 at 7% compounded quarterly for 5 years. Quarterly rate = 1.75%, periods = 20. Final = 5L × (1.0175)^20 = ₹7,08,000 approx.
Example 2 – SIP with compounding: ₹10,000 monthly at 12% annual (1% monthly) for 15 years. Use monthly contribution mode. Final ≈ ₹50,00,000.
Example 3 – Loan EMI (reverse): Compound interest works against you. A ₹10,00,000 personal loan at 15% compounded monthly for 5 years results in total payment ~₹14,27,000.
Compound interest is the most powerful force in finance. Whether you're saving for retirement, a child's education, or a dream home, understanding and harnessing compounding can turn modest savings into substantial wealth. Our Compound Interest Calculator empowers you to experiment with different scenarios and see the long-term impact.
Start using the Compound Interest Calculator above now. Input your numbers, adjust monthly contributions, and watch your money grow. Remember – time is your greatest ally in compounding.