Compound Interest Calculator
Grow a lump sum and regular deposits at any compounding frequency.
Balance year by year
Year-by-year breakdown
Same deposit, other compounding frequencies
How this was calculated
Results are estimates for general information and planning, not financial advice. Banks and institutions may calculate differently (rounding, fees, rate changes). Confirm figures with your lender or a qualified adviser before deciding.
About the Compound Interest Calculator
Compound interest is interest earned on interest: each time interest is added to the balance, the next period's interest is worked out on the larger amount. Over long periods this snowballs — at 7.5% a year, money doubles in under ten years.
Enter a starting amount, the annual rate, the time and how often interest is compounded: yearly, half-yearly, quarterly, monthly, daily or continuously. Optionally add a regular deposit every month or year, made at the start or the end of each period, like a recurring deposit. You get the maturity amount, the interest earned, the effective annual rate and a year-by-year table.
How to use it
- Enter the starting amount, the interest rate per year and the time in years and months.
- Choose how often interest is compounded — the terms of your deposit or investment state this.
- Optionally add a regular deposit and choose whether it is made every month or every year, at the start or the end of the period.
- Read the maturity amount, interest earned and effective annual rate. The chart, the yearly table and the frequency comparison show how the balance grows.
Examples
Yearly ₹16,289 · Quarterly ₹16,436 · Monthly ₹16,470 · Daily ₹16,487 · Continuous ₹16,487
Maturity amount ₹40,68,209 · deposited ₹22,50,000 · interest ₹18,18,209
Maturity amount ₹73,376 · deposited ₹60,000
The compound interest formula
A = P × (1 + r ÷ m)^(m × t)
- P is the starting amount and r the annual rate as a decimal (7.5% → 0.075)
- m is the number of compounding periods a year: 1 yearly, 2 half-yearly, 4 quarterly, 12 monthly, 365 daily
- t is the time in years (months count as twelfths)
With continuous compounding the formula becomes A = P × e^(r × t). The interest earned is A − P.
The effective annual rate
The effective annual rate (EAR, also called the annual percentage yield) is what you really earn in a year once compounding is included: EAR = (1 + r ÷ m)^m − 1. At 5% a year, yearly compounding gives 5%, quarterly 5.095%, monthly 5.116% and continuous 5.127%. Compare the EAR when two deposits compound differently.
How regular deposits are handled
Each deposit earns compound interest from the day it is made. Deposits that fall between compounding dates grow at the equivalent rate for their own period — (1 + EAR)^(1/12) − 1 a month for monthly deposits — so every rupee earns the same effective annual rate.
Choose Start of period for deposits made in advance (the first one today) or End of period for deposits made at the end of each month or year. Over a part-year, only deposits that fall inside the period are counted.
Limitations
- Assumes the interest rate stays the same for the whole period.
- Tax on interest and any fees or charges are not deducted.
- For a part period (for example 2 years 1 month with quarterly compounding) the leftover time is compounded at the same effective rate. Banks often pay simple interest for leftover days instead, which gives slightly more, so their figure can differ a little.
- Daily compounding uses 365 days a year.
Privacy
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Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is paid only on the original amount; compound interest is also paid on interest already added. ₹1 lakh at 8% for 10 years earns ₹80,000 of simple interest but ₹1,15,892 with yearly compounding. See the simple interest calculator to compare.
How often should interest compound?
More often is better for savers, but the gain shrinks quickly: going from yearly to quarterly adds more than going from monthly to daily. The comparison table shows the effective annual rate and the final amount for every frequency.
What does continuous compounding mean?
It is the mathematical limit of compounding more and more often — in effect every instant. It gives the highest amount possible at a given rate: e^r − 1 a year, about 5.127% for a 5% rate. Few real products compound continuously; it is mostly used in finance theory and for comparison.
Should deposits be at the start or the end of the period?
If you deposit at the beginning of each month, choose start of period: every deposit then earns one extra period of interest. If you deposit at the end of each month, for example from your salary, choose end of period.