Compound Interest Calculator

FREEFinance & Business

TOOLCompound Interest Calculator

Principal Amount$10.0K

$100.00$1.00M

Annual Interest Rate7%

0.5%30%

Time Period10 years

1 years50 years

Compounding Frequency

Monthly Contribution (optional)$500.00

$0.00$10.0K

Total

$106.6K

Invested

Interest

Initial Investment

$10,000

Total Contributions

$60,000

Interest Earned

$36,639

Final Amount

$106,639

Effective Growth

52.3%

Simple Interest

$7,000

SI Total

$77,000

CI Advantage

$29,639

Year-by-Year Growth

$16.9K

$24.3K

$32.3K

$40.8K

$50.0K

$59.8K

$70.3K

$81.6K

$93.7K

Y10

$106.6K

Principal + Contributions

Interest Earned

Compound Interest vs Simple Interest

Simple Interest

$7,000

Total: $77,000

Compound Interest

$36,639

Total: $106,639

Extra with CI

$29,639

423.4% more

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About Compound Interest Calculator

Compound interest is the foundational principle behind every investment — the idea that interest earns interest. Albert Einstein reportedly called it the eighth wonder of the world, and for good reason: at 12% compounding annually, Rs 1 lakh becomes Rs 3.1 lakh in 10 years and Rs 9.6 lakh in 20. This calculator lets you explore the full power of compounding across frequencies (daily, monthly, quarterly, annual) with optional monthly contributions, and compares the result against simple interest.

How It Works

The compound interest formula A = P(1 + r/n)^(nt) is the core engine. P is the principal (initial amount), r is the annual interest rate as a decimal, n is the number of compounding periods per year (365 for daily, 12 for monthly, 4 for quarterly, 1 for annual), and t is the time in years.

When you add monthly contributions, each contribution is treated as a separate deposit that compounds for its remaining tenure. The combined result is the sum of the principal's compounded value and the future value of the annuity formed by the monthly contributions. The year-by-year table shows both the cumulative contributions and the total portfolio value, making it easy to see how much of the growth comes from contributions versus compounding.

The simple interest comparison uses SI = P × r × t, showing the dollar (or rupee) difference between simple and compound growth — which becomes dramatic over 20+ year horizons.

Who Is This For

A student learning about investing comparing how Rs 10,000 grows at 8% under daily, monthly, quarterly, and annual compounding over 30 years.

A savings account holder checking the impact of daily compounding versus quarterly compounding when choosing between two bank accounts.

A finance teacher demonstrating why starting to invest Rs 5,000/month at 25 versus 35 results in a dramatically different retirement corpus.

An investor modelling a Rs 50 lakh inheritance plus Rs 10,000/month additional savings at 10% for 15 years.

Scope note: Uses the standard compound interest formula — a mathematical model assuming a constant interest rate throughout the period. Real investments (equity, mutual funds) have variable annual returns. For bank FDs and small savings schemes, verify the actual compounding frequency with your financial institution. The monthly contribution model assumes contributions are made at the start of each month.

Disclaimer: This calculator is for informational and educational purposes only and does not constitute financial, tax, or legal advice. Results are estimates based on publicly available tax slabs and formulas. Consult a qualified Chartered Accountant, tax professional, or financial advisor for guidance specific to your situation. Built and maintained by the WOWHOW Team with 14+ years of software development experience.

How to Use

Enter the principal (initial investment) amount

Set the annual interest rate

Choose time period and compounding frequency

Optionally add monthly contributions for recurring investment growth

Frequently Asked Questions

Compound interest is interest calculated on both the initial principal and accumulated interest. Unlike simple interest, it grows exponentially over time.

Daily compounding gives highest returns, followed by monthly, quarterly, half-yearly, and annual.

A = P(1 + r/n)^(nt), where P = principal, r = annual rate, n = compounding frequency, t = years.

Monthly contributions are compounded separately from the principal. Each month's contribution earns interest from its deposit date until maturity. The combined formula is: Total = P(1+r/n)^(nt) + C × [(1+r/n)^(nt) − 1] / (r/n), where C is the monthly contribution. This combined compounding is why regular savings alongside an initial investment grow much faster than principal alone.

Simple interest is calculated only on the principal: SI = P × r × t. Compound interest earns interest on the accumulated interest as well. For a Rs 1 lakh principal at 10% for 10 years: simple interest gives Rs 1 lakh total interest (Rs 2 lakh total), while annual compounding gives Rs 1.59 lakh interest (Rs 2.59 lakh total) — a 59% higher return from compounding alone.

Daily compounding is used by many savings accounts in the US and some sweep accounts in India. Most Indian bank FDs compound quarterly. Credit card interest is often compounded daily (at a high rate). Mutual funds conceptually grow continuously since NAV reflects daily gains. PPF and NSC use annual compounding.