Compound Interest Calculator
Last Updated: 8 April 2026
Compound Interest Calculator
Calculate how your investments grow with the power of compounding
Enter details & click "Calculate Returns"
What is Compound Interest Calculator?
Compound Interest (CI) is the concept of earning 'Interest on Interest'. Unlike Simple Interest where your principal remains static, in CI, the interest earned is added back to the principal, and future interest is calculated on this new, larger amount. This is the secret behind wealth creation.
📊 Practical Example
"If you invest ₹1 Lakh at 10% for 20 years: With Simple Interest, you get ₹3 Lakhs total. With Compound Interest, you get roughly ₹6.72 Lakhs! That massive difference of ₹3.72 Lakhs comes entirely from the power of compounding."
⚠️ Common Mistake
Applying Yearly Compounding to all comparisons. Most Bank FDs compound Quarterly (4 times a year), while Mutual Funds effectively compound daily/NAV-based. Always check the frequency—more frequent compounding means higher returns.
How it Works & Benefits
Power of Compounding
See how money multiplies faster over time (Interest on Interest).
Flexible Frequency
Supports Yearly, Half-Yearly, Quarterly, and Monthly compounding.
Compare Returns
Check why FDs (High Compounding) are better than Simple Interest.
Frequently Asked Questions
Common queries answered for you
Compound Interest is when you earn interest on both the money you've saved and the interest you earn. It is often called 'Interest on Interest'.
In India, most banks compound interest Quarterly (every 3 months) for Fixed Deposits. Savings accounts usually calculate interest Daily but credit it Quarterly.
A = P(1 + r/n)^(nt). Here A is Amount, P is Principal, r is rate, n is compounding frequency per year, and t is time in years.
Because your money grows exponentially. In SI, your ₹100 interest sits idle. In CI, that ₹100 starts earning its own interest next year.
Additional Information
The Magic of Compounding Example
Imagine investing ₹1 Lakh at 10% for 20 years.
Using Simple Interest, you earn ₹2 Lakh interest. Total: ₹3 Lakh.
Using Compound Interest, you earn ₹5.7 Lakh interest. Total: ₹6.7 Lakh!
That extra ₹3.7 Lakh is pure magic of time and compounding.
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