Compound Interest Calculator
Calculate compound interest, total amount, and compare with simple interest for any principal and rate.
Compound interest calculator finds CI amount, total maturity value, and simple interest for comparison. Enter principal, annual rate, time in years, and compounding frequency: annually, semi-annually, quarterly, monthly, or daily. The formula used is A = P × (1 + r/n)^(nt). Results show how much more compound interest earns over simple interest. Free, no signup required.
Compound Interest
₹63,862
₹63,862
Total Amount
₹1.64 L
₹1,63,862
Simple Interest
₹50,000
₹50,000 at same rate
Extra Earned (CI vs SI)
₹13,862
₹13,862 more than SI
Compounding quarterly on ₹1,00,000 at 10% for 5 yr
Frequently Asked Questions
- What is the compound interest formula?
- A = P × (1 + r/n)^(nt). P is the principal. r is annual rate / 100. n is compounding periods per year, and t is time in years. CI = A minus P. For ₹1,00,000 at 10% compounded quarterly for 2 years: A = 1,00,000 × (1.025)^8 = ₹1,21,840.
- What is the difference between simple interest and compound interest?
- Simple interest is calculated only on the principal. Compound interest is calculated on the principal plus accumulated interest. On ₹1,00,000 at 10% for 3 years: SI = ₹30,000. CI compounded annually = ₹33,100. The ₹3,100 difference is the effect of interest earning interest.
- How much does ₹1 lakh become in 5 years at 10% compound interest?
- ₹1,00,000 at 10% compounded annually for 5 years becomes ₹1,61,051. Compounded monthly, it becomes ₹1,64,533. The total compound interest is ₹61,051 annually or ₹64,533 monthly. Simple interest over the same period would be ₹50,000.
- Which compounding frequency gives the highest return?
- Daily compounding gives the highest return, followed by monthly, quarterly, semi-annually, and annually. The difference between daily and monthly is small for typical rates. For ₹1,00,000 at 10% for 5 years: monthly CI = ₹64,533 versus daily CI = ₹64,862, a difference of ₹329.
- What is compound interest used for in India?
- Banks use compound interest for fixed deposits, recurring deposits, and savings accounts. NSC and KVP post office schemes compound annually. Home loans and personal loans also compound monthly. EPF and PPF use annual compounding. Understanding CI helps compare investment returns across instruments.
- How do I calculate compound interest for 2 years?
- For 2 years at annual compounding: CI = P × [(1 + r)^2 - 1]. For ₹50,000 at 8%: CI = 50,000 × [(1.08)^2 - 1] = 50,000 × 0.1664 = ₹8,320. Total amount = ₹58,320. For quarterly compounding over the same period, use n=4: A = 50,000 × (1 + 0.02)^8 = ₹58,508.
- What is the Rule of 72 for compound interest?
- The Rule of 72 estimates how many years a sum takes to double. Divide 72 by the annual interest rate. At 8% annual CI, money doubles in 72/8 = 9 years. At 12%, it doubles in 6 years. At 6%, it takes 12 years. The rule gives a fast mental check without a calculator.
What is Compound Interest Calculator?
Compound interest calculator computes the interest earned when interest itself earns interest over time. The compound interest formula is A = P × (1 + r/n)^(nt). P is the principal amount. r is the annual rate divided by 100. n is the number of compounding periods per year. t is the time in years. CI equals A minus P.
The calculator also shows simple interest for the same inputs so you can see the exact rupee advantage of compounding.
How does it work?
Enter four values: principal, annual rate, years, and compounding frequency. Five frequency options are available: annually (n=1), semi-annually (n=2), quarterly (n=4), monthly (n=12), and daily (n=365).
Consider ₹1,00,000 at 10% compounded quarterly for 3 years. The quarterly rate is 10/4 = 2.5%. The number of periods is 3 × 4 = 12. A = 1,00,000 × (1.025)^12 = ₹1,34,489. CI = ₹34,489. Simple interest for the same period = ₹30,000. The extra ₹4,489 comes from interest compounding on previously earned interest.
Higher compounding frequency means slightly higher returns. The gap between monthly and daily compounding is small at typical rates. A ₹1 lakh investment at 10% for 10 years: monthly compounding yields ₹1,70,070 in interest; daily compounding yields ₹1,71,828. The ₹1,758 difference matters over large principals.
Compound Interest Calculator in India
Most Indian savings and investment instruments use compound interest. Bank fixed deposits compound quarterly by default across SBI, HDFC, ICICI, and Axis. Some banks offer monthly compounding on short-tenure FDs. The effective annual rate for a 7% FD compounding quarterly is 7.19%, not 7%.
Post office schemes vary by product. National Savings Certificate (NSC) compounded annually at 7.7% for 5 years turns ₹1,00,000 into ₹1,44,903. Kisan Vikas Patra doubles money in a fixed period using annual compounding. PPF and EPF also use annual compounding at rates set by the government each quarter.
RBI repo rate changes affect FD and loan rates. When the repo rate rises, banks raise FD rates. A 0.5% rate increase on ₹5,00,000 for 5 years adds roughly ₹14,000 in additional CI at quarterly compounding.
The compound interest formula applies to loans too. A personal loan at 16% per annum compounded monthly accumulates interest faster than the headline rate suggests. Always check the effective annual rate when comparing loan offers. Banks are required by RBI to disclose the effective rate alongside the nominal rate.
Tips to get the best results
- Compare the CI result against simple interest to understand the compounding advantage. For short durations of one to two years, the gap is small. Over ten years or more, CI can double the returns.
- Use the quarterly frequency for FD calculations. Most Indian banks compound FD interest quarterly, not annually or monthly.
- For loan calculations, the same formula applies in reverse. A higher compounding frequency on a loan means you pay more interest. Check whether your loan agreement specifies monthly or quarterly compounding.
- Use the Rule of 72 as a quick check. Divide 72 by the annual rate to get the approximate doubling time. At 10%, money doubles in roughly 7.2 years under annual compounding.
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