Compound Interest Calculator
Calculate how your investments grow over time with the power of compounding. Plan your savings, FD, RD, or any investment with monthly contributions.
Investment Details
Investment Growth Results
Future Value
Total Interest
₹ 69,112
Total Investment
₹ 1,50,000
Annual Growth Rate
8%
Investment Breakdown
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Calculate NowAbout Compound Interest Calculator
Compound interest is the interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan. It's often called "interest on interest" and is what makes investments grow exponentially over time.
Our Compound Interest Calculator helps you understand how your money can grow when you invest with regular contributions. Whether you're planning for retirement, saving for a goal, or investing in fixed deposits, this calculator shows you the power of compounding.
The formula for compound interest is: A = P(1 + r/n)^(nt) where:
- A = Future value of the investment
- P = Principal investment amount
- r = Annual interest rate (decimal)
- n = Number of times interest is compounded per year
- t = Time in years
How Compound Interest Works
Compound interest is the secret to wealth creation. Here's a simple example:
Example Calculation:
Investment: ₹1,00,000 at 8% annual interest for 10 years
| Year | Principal | Interest | Total |
|---|---|---|---|
| Year 1 | ₹1,00,000 | ₹8,000 | ₹1,08,000 |
| Year 2 | ₹1,08,000 | ₹8,640 | ₹1,16,640 |
| Year 10 | ₹2,15,892 | ₹17,271 | ₹2,33,163 |
Total Interest Earned: ₹1,33,163 (133% growth in 10 years)
Notice how in Year 2, you earn interest on ₹1,08,000 (not just the original ₹1,00,000). This "interest on interest" effect accelerates your wealth growth over time.
Frequently Asked Questions
Compound interest is interest calculated on the initial principal and also on the accumulated interest from previous periods. It's often called "interest on interest" and causes wealth to grow exponentially over time.
The more frequently interest is compounded, the faster your money grows. Monthly compounding is common for most investments. Daily compounding gives the highest returns but is less common.
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. Example: At 8% interest, your money doubles in approximately 9 years (72 ÷ 8 = 9).
Lump sum investing gives your money more time to compound. However, regular monthly investments (SIP) help average out market fluctuations and build discipline. A combination of both is often best.
Compounding has the most powerful effect over long periods. Small, regular investments can grow into substantial amounts over 10-20 years due to compounding. Starting early gives you the biggest advantage.