Compound Interest Calculator
Calculate compound interest on investments.
Input & results
Input values
Results
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Calculation History
- Your calculations will appear here.
Recent calculations are saved automatically as you adjust inputs.
Financial results are estimates for informational purposes only and are not financial, tax, or investment advice. Verify figures with a qualified professional before making decisions. See our full disclaimer.
What is Compound Interest?
A Compound Interest Calculator shows how an investment or deposit grows when interest is earned on both the original principal and previously accumulated interest. It demonstrates the snowball effect that makes long-term saving powerful.
Unlike simple interest, which is calculated only on the principal, compound interest is added to the balance so that future interest is earned on a larger amount. The frequency of compounding — annually, quarterly, monthly, or daily — affects the final amount. This calculator applies A = P(1 + r/n)^(nt) to project the maturity value and the interest earned over your chosen time horizon.
Why is it used?
Compounding is the core engine behind savings, fixed deposits, and investments. Seeing how principal, rate, time, and compounding frequency interact helps you compare products and understand why longer horizons and more frequent compounding produce larger returns.
Who should use it?
Savers comparing deposit products, investors estimating growth, and students learning the difference between simple and compound interest.
How it works
- Enter Principal Amount, Annual Rate (%), Time (years), Compounds per Year in the input fields.
- The calculator validates your entries and applies the correct compound interest formula.
- Results update in real time as you change any value — no submit button needed.
- Review the formula, variable definitions, and worked example below to see how the answer is derived.
Formula
Variable definitions
| Variable | Meaning |
|---|---|
| A | Final amount (principal + interest) |
| P | Principal (initial amount) |
| r | Annual interest rate as a decimal |
| n | Compounding periods per year |
| t | Time in years |
How the formula works
- Convert the annual rate to a decimal: r = rate ÷ 100.
- Divide r by the number of compounding periods n.
- Raise (1 + r/n) to the power n × t.
- Multiply by principal P; interest earned = A − P.
Example calculation
₹1,00,000 at 8% compounded quarterly for 5 years.
| Input | Value |
|---|---|
| Principal | ₹1,00,000 |
| Rate | 8% |
| Frequency | Quarterly (n=4) |
| Time | 5 years |
- r = 0.08, n = 4, t = 5
- A = 100000 × (1 + 0.08/4)^(4×5)
- A = 100000 × (1.02)^20
- A ≈ ₹1,48,595
Result
More examples
Same deposit compounded monthly instead of quarterly.
| Input | Value |
|---|---|
| Principal | ₹1,00,000 |
| Rate | 8% |
| Frequency | Monthly |
| Time | 5 years |
- (1 + 0.08/12)^60 = 1.4898
- A ≈ ₹1,48,985
Result
Methodology
- Gather Principal Amount, Annual Rate (%), Time (years), Compounds per Year from your documents or estimates.
- Enter each value in the matching field; units must match the labels.
- The calculator applies the Compound Interest formula and updates results in real time.
- Compare scenarios by changing one input at a time.
Benefits
- Project the true growth of savings and investments.
- Compare compounding frequencies on equal terms.
- See the gap between simple and compound interest.
- Plan how long to stay invested to hit a target.
Use cases
- Estimating fixed-deposit or savings-account maturity.
- Comparing investment products with different compounding.
- Teaching the mathematics of compounding.
- Setting time horizons for long-term goals.
Tips & important notes
- More frequent compounding increases returns, but the effect shrinks at high frequencies.
- Time is the most powerful lever — start early.
- Compare products using the effective annual rate, not just the nominal rate.
- Reinvest interest to keep compounding working.
Common mistakes
- Entering the rate as a whole number where a decimal is expected.
- Confusing the number of compounding periods with the number of years.
- Comparing nominal rates without accounting for compounding frequency.
Related concepts
- Simple interest and how it differs from compounding
- Effective annual rate (EAR)
- The rule of 72 for doubling time
Good to know