See how your money grows when interest earns interest. Choose any compounding frequency and add optional monthly deposits.
What is compound interest?
Compound interest is interest you earn on your original money and also on the interest already added. Each time interest is added, your balance gets bigger, and the next round of interest is calculated on that larger amount. Over many years this snowball effect makes a big difference.
Use this calculator to see the future value of a savings or investment amount. Try different compounding frequencies and monthly deposits to see how each one changes your result.
Compound interest formula
A = P × (1 + r ÷ n)^(n × t)
A = final amount · P = principal · r = annual rate (as a decimal) · n = times compounded per year · t = time in years
Example
If you invest ₹1,00,000 at 8% per year for 10 years with yearly compounding, it grows to about ₹2,15,892. You earn about ₹1,15,892 in interest. With simple interest you would earn only ₹80,000 on the same amount.
Simple interest vs compound interest
- Simple interest is calculated only on the original principal, so it grows in a straight line.
- Compound interest is calculated on the principal plus earned interest, so it grows faster each year.
- The longer you stay invested, the bigger the gap becomes.
The Rule of 72
To estimate how long your money takes to double, divide 72 by the yearly interest rate. At 8% your money doubles in about 9 years. At 12% it doubles in about 6 years.
Tips to make compounding work harder
- Start as early as you can. Time matters more than the amount.
- Add money regularly, even small amounts.
- Leave your interest invested instead of withdrawing it.
- Look for accounts that compound more often at the same rate.
Frequently asked questions
What is compound interest?
Compound interest is interest earned on both your original money and on the interest it has already earned. Because interest earns interest, your balance grows faster over time than with simple interest.
What is the compound interest formula?
A = P × (1 + r ÷ n)^(n × t), where A is the final amount, P is the principal, r is the annual rate as a decimal, n is how many times interest compounds per year and t is the time in years.
What is the difference between simple and compound interest?
Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus all interest already added, so it grows faster, especially over long periods.
Does compounding frequency matter?
Yes. The more often interest compounds, such as monthly or daily instead of yearly, the more you earn at the same rate. The difference is small over short periods but grows over many years.
What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long your money takes to double. Divide 72 by the annual interest rate. At 8% your money doubles in about 9 years.
Can I add monthly deposits?
Yes. Enter an amount in the monthly deposit field. The calculator adds it at the end of every month and compounds it along with your principal.
This calculator gives estimates for information only and is not financial advice. Actual returns depend on your bank or investment.
