Compound Interest Calculator
Compound interest is one of the most powerful tools in long-term wealth building — it allows your money to grow not just on the principal, but also on the accumulated interest over time. This calculator helps you visualize how even modest, regular investments can grow exponentially when interest is compounded annually, quarterly, monthly, or even daily.
Principal:₹1,00,000
Total Interest:₹0
Total Maturity Value:₹0
📈 Total Amount Over Time
🍩 Principal vs Interest
📊 Interest Breakdown
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Learn More📅 Year-wise Breakdown
| Year | Interest (₹) | Total Amount (₹) |
|---|
Compound interest is the process where interest is calculated not only on the original principal but also on the accumulated interest from previous periods. It’s commonly referred to as “interest on interest” and plays a powerful role in accelerating the growth of savings and investments over time.
This formula helps estimate how wealth grows over time with regular compounding. Compound interest has real-world applications in many financial instruments like fixed deposits, savings accounts, mutual funds, credit cards, and home loans. Whether you're earning or paying it, understanding compound interest helps in making smart financial decisions.
The frequency of compounding—annually, quarterly, monthly, or even daily—affects how much your money grows. The more frequently the interest is compounded, the higher the total amount you receive or owe. This calculator helps you explore different compounding scenarios.
Historically, compound interest has roots in ancient Mesopotamia around 2000 BCE. Later, mathematicians like Jacob Bernoulli and Euler formalized the mathematics behind it, laying the foundation of modern financial theory including continuous compounding.
The true strength of compounding lies in time. Even modest, consistent contributions over the years can result in significant returns thanks to the exponential growth curve. That’s why starting early is a core principle of financial planning.
In summary, compound interest remains one of the most fundamental forces in finance. From students learning personal finance to retirees managing savings, this concept is universally relevant. Use this calculator to visualize how your money can grow — intelligently and efficiently.
📘 How is Compound Interest Calculated?
The compound interest formula is:A = P × (1 + r/n)nt
- P = Principal amount (initial investment)
- r = Annual interest rate (as a decimal)
- n = Number of times interest is compounded per year
- t = Time in years
Total Interest = A - P and Maturity Amount = A. This formula shows how your money grows faster when interest is compounded more frequently.
💡 Tips for Using the Compound Interest Calculator
- Choose a higher compounding frequency (like monthly) for better returns.
- Use realistic interest rates based on your bank or investment instrument.
- Start early — even small amounts grow big over time with compounding.
- Compare different durations to see long-term growth differences.
- This calculator is ideal for fixed deposits, savings accounts, and recurring investments.
❓ Frequently Asked Questions
- Q: Is compound interest better than simple interest?
A: Yes, compound interest earns more as interest is calculated on previous interest too. - Q: Which frequency gives best returns?
A: Monthly or quarterly compounding usually yields better results. - Q: Is FD compound interest?
A: Yes, most bank FDs compound interest (quarterly in India).