Compound Interest Calculator
Calculate compound interest and the maturity amount for any compounding frequency.
Maturity amount
1.49 lakhYear-wise growth
| Year | Principal | Interest earned | Amount |
|---|---|---|---|
| 1 | ₹1,00,000 | ₹8,243 | ₹1,08,243 |
| 2 | ₹1,00,000 | ₹17,166 | ₹1,17,166 |
| 3 | ₹1,00,000 | ₹26,824 | ₹1,26,824 |
| 4 | ₹1,00,000 | ₹37,279 | ₹1,37,279 |
| 5 | ₹1,00,000 | ₹48,595 | ₹1,48,595 |
Compare compounding frequencies
The same principal, rate and time period, compounded at different frequencies.
| Compounding | Interest earned | Maturity amount | Effective annual rate |
|---|---|---|---|
| Yearly | ₹46,933 | ₹1,46,933 | 8% |
| Quarterly | ₹48,595 | ₹1,48,595 | 8.24% |
| Monthly | ₹48,985 | ₹1,48,985 | 8.3% |
| Daily (365-day year) | ₹49,176 | ₹1,49,176 | 8.33% |
How it works
Compound interest on a one-time amount is calculated as:
A = P × (1 + r ÷ (100 × m))m × t
- A = maturity amount
- P = principal (amount invested once, at the start)
- r = interest rate, % per year
- m = compounding periods per year (1 yearly, 2 half-yearly, 4 quarterly, 12 monthly, 365 daily)
- t = time in years
Interest earned = A − P. The effective annual rate is (1 + r ÷ (100 × m))m − 1. Real deposits can differ slightly, for example in how a bank counts days or handles a part-period. Daily compounding here assumes a 365-day year (m = 365).
Rule of 72
A quick way to estimate how long money takes to double: divide 72 by the yearly interest rate. At 8%, that is 72 ÷ 8 = 9 years. The exact answer with yearly compounding is ln 2 ÷ ln(1 + r ÷ 100). The rule is a mental shortcut and is most accurate for rates near 8%.
| Rate | Rule of 72 | Exact (yearly compounding) |
|---|---|---|
| 6% | 12 years | 11.9 years |
| 8% | 9 years | 9.01 years |
| 10% | 7.2 years | 7.27 years |
| 12% | 6 years | 6.12 years |
Rates in this table are only examples to show the rule.
Worked example
You invest ₹10,000 at 8% a year for2 years, compounded quarterly (m = 4).
- Rate per quarter = 8 ÷ (100 × 4) = 0.02
- Number of quarters = 4 × 2 = 8
- (1 + 0.02)8 ≈ 1.171659
- A = ₹10,000 × 1.171659 = ₹11,716.59
- Interest earned = ₹11,716.59 − ₹10,000 = ₹1,716.59
Frequently asked questions
What is compound interest?
Compound interest is interest earned on both your original amount and on the interest already added to it. Because the base keeps growing, the amount grows faster over time than with simple interest.
What is the difference between simple and compound interest?
Simple interest is paid only on the original amount. In the worked example above, simple interest would be ₹1,600, while compound interest is ₹1,717. The gap widens the longer the money stays invested.
How does compounding frequency change the result?
The more often interest is added (quarterly, monthly, daily), the sooner it starts earning interest of its own, so the final amount is slightly higher for the same annual rate. Switch the frequency in the calculator to compare.
What is the effective annual rate?
It is the yearly rate that gives the same result with once-a-year compounding: (1 + r ÷ (100 × m))^m − 1. It lets you compare products that quote the same rate but compound at different frequencies.
Which compounding frequency does my fixed deposit use?
It depends on the bank and the deposit type. Check the terms of your deposit or ask your bank, then choose that frequency here.
Does the result include tax on interest?
No. Interest income may be taxable and tax may be deducted at source, which reduces what you receive. The calculator shows the amount before any tax.
Does this work for money I add every month?
No, this calculator is for a one-time amount. For regular monthly investments, use the SIP calculator.