Compound Interest Calculator
Estimate total amount and interest earned on your investment or loan with flexible monthly, quarterly, half-yearly, or yearly compounding.
Calculate Compound Interest
What Is Compound Interest?
Compound interest is interest calculated on the initial principal plus all previously accumulated interest. Unlike simple interest, which only ever earns on the principal, compound interest creates a snowball effect — your money earns money, and that money earns even more.
This is why long-horizon investments (PPF, mutual funds, fixed deposits) deliver outsized returns. The more frequently interest compounds (monthly vs yearly), the larger your final corpus.
The Compound Interest Formula
A = P × (1 + r/n)n×t
- A = Final amount (principal + interest)
- P = Principal amount invested or borrowed
- r = Annual interest rate (decimal, e.g. 5% = 0.05)
- n = Number of times interest compounds per year (1, 2, 4, or 12)
- t = Time in years
Total interest earned: I = A − P.
Why Compounding Frequency Matters
On ₹1,00,000 invested at 8% for 10 years, here's how the final amount changes by compounding frequency:
| Frequency | Final Amount | Interest Earned |
|---|---|---|
| Yearly (n=1) | ₹2,15,892 | ₹1,15,892 |
| Half-Yearly (n=2) | ₹2,19,112 | ₹1,19,112 |
| Quarterly (n=4) | ₹2,20,804 | ₹1,20,804 |
| Monthly (n=12) | ₹2,21,964 | ₹1,21,964 |
Monthly compounding edges out yearly by about ₹6,000 over 10 years — small per period, meaningful over time.