See how your money grows with the power of compounding
Enter your initial investment or loan amount. This is the base on which compounding begins.
Enter the annual interest rate and how many years you plan to invest. The longer the time, the more dramatic the compounding effect.
Select how often interest is compounded — monthly gives the highest returns, then quarterly, then annually. Most FDs in India compound quarterly.
The calculator shows total amount, compound interest earned, and compares it with Simple Interest to show how much extra you earn through compounding.
Compound Interest Formula: A = P × (1 + r/n)^(n×t)
Where: P = principal | r = annual rate | n = compounding frequency | t = years
Example: ₹1,00,000 @ 10% for 10 years (annually) = ₹2,59,374 vs SI = ₹2,00,000
Compound Interest is interest calculated on the initial principal plus all previously accumulated interest. This means your interest also earns interest, creating a snowball effect. Albert Einstein reportedly called it the "eighth wonder of the world."
A = P × (1 + r/n)^(n×t), where A = final amount, P = principal, r = annual interest rate (as decimal), n = number of times interest compounds per year, t = time in years. CI = A - P.
Monthly compounding gives slightly more returns than quarterly, which gives more than annual. For example, ₹1 lakh at 8% for 5 years: Annual = ₹1,46,933 | Quarterly = ₹1,48,451 | Monthly = ₹1,48,976. The difference is small but adds up over long periods.
PPF (annual compounding), FD (quarterly compounding), EPF (annual compounding), Mutual Funds (daily NAV-based compounding), RD (quarterly compounding), and NPS all use compound interest, making them excellent long-term wealth-building instruments.
Rule of 72 is a quick way to estimate how long it takes to double your money. Simply divide 72 by the annual interest rate. At 8% interest, your money doubles in 72/8 = 9 years. At 12%, it doubles in 6 years. This works for compound interest.