Compound Interest Calculator

Monthly compound interest uses: A = P × (1 + r/n)^(n×t). Here P is your principal, r is the annual rate (as a decimal), n is 12 for monthly compounding, and t is years. Example: invest ₹1 lakh at 8% for 5 years, compounded monthly. A = 100000 × (1 + 0.08/12)^(12×5) = ₹1,48,985. So you've earned about ₹48,985 in interest. Compounding monthly versus annually adds a small but real boost — over long horizons, that difference grows. The calculator handles any frequency you choose.

Simple interest is calculated only on the original principal, every period. Compound interest is calculated on the principal plus all the interest already earned. The gap is small at first and massive over time. ₹1 lakh at 8% for 20 years: simple interest gives you ₹2.6 lakh total. Compound interest, annually compounded, gives you ₹4.66 lakh — almost ₹2 lakh extra, just from letting interest earn interest. This is why starting investments early matters so much. Compounding rewards time more than it rewards the amount invested.

Use A = P × (1 + r/12)^(12×t) for monthly compounding. Example: ₹2 lakh invested at 9% for 10 years. A = 200000 × (1 + 0.09/12)^120 = roughly ₹4,90,400. So your money more than doubles, growing by about ₹2.9 lakh in interest. Even small differences in the rate matter at this horizon — at 8% the same investment grows to about ₹4.46 lakh. Add monthly contributions and the corpus grows much faster. The calculator lets you test these scenarios with your own numbers in a few clicks.

Daily compounding earns slightly more than monthly, but the gap is smaller than most people assume. ₹1 lakh at 8% for 10 years: monthly compounding gives you ₹2,21,964. Daily compounding gives ₹2,22,535 — a difference of about ₹571 over 10 years. Real difference shows up over very long horizons or with very high rates. Most Indian savings products compound quarterly or annually, so daily compounding is more relevant for US savings accounts and some debt instruments. Don't choose a product just because it advertises daily compounding — the rate and credibility of the issuer matter more.

For regular monthly deposits, use the future value of annuity formula: FV = P × [((1 + r)^n − 1) / r] × (1 + r), where P is your monthly deposit, r is the monthly rate, and n is the total months. Example: ₹10,000 a month for 10 years at 12% annual (1% monthly) gives FV = ₹23,23,391 approximately. You've put in ₹12 lakh and earned over ₹11 lakh in compounded growth. The calculator does this for SIPs and recurring deposits both. Add a starting lump sum if you have one — that grows alongside your deposits.

The "Rule of 72" is the quickest way: divide 72 by your annual interest rate to estimate years to double. At 8%, money doubles in roughly 9 years. At 12%, around 6 years. At 6%, about 12 years. It's an approximation — the exact formula is t = ln(2) ÷ ln(1+r) — but the Rule of 72 is accurate enough for everyday planning. So if you want your investment to double in 7 years, you need close to 10.3% returns. The calculator shows the exact doubling time for any rate and compounding frequency you pick.

Manually, use A = P × (1 + r)^t for annual compounding. P is principal, r is the rate as a decimal, t is years. Example: ₹50,000 at 10% for 5 years. A = 50000 × (1.10)^5 = 50000 × 1.6105 = ₹80,525. Interest earned = ₹30,525. For monthly compounding, swap the formula to A = P × (1 + r/12)^(12t). The trickiest part is calculating (1+r)^t — most people use a calculator anyway. Do it on paper once to feel how compounding builds, then let our tool handle the heavy lifting.