Compound Interest Calculator
This is the general-purpose interest calculator every other compounding calculator on this site is built on — use it directly for a quick projection, or as a reference for how deposits like FDs compound.
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What is the Compound Interest Calculator?
Compound interest is interest calculated on both your original principal and the interest that's already been added to it — so your money grows faster over time than with simple interest, which is only ever calculated on the original principal. This is the mechanism behind fixed deposits, recurring deposits and most long-term investments.
How to Calculate
Enter the principal amount, the annual interest rate, how many years you'll stay invested, and how often the interest compounds — annually, quarterly (common for Indian bank FDs) or monthly. More frequent compounding produces a slightly higher final amount for the same stated annual rate, which the calculator also compares against simple interest so you can see the difference.
Formula
Compound interest: A = P × (1 + r/n)n×t
Simple interest: A = P × (1 + r×t)
Where n is the compounding frequency per year (Indian bank FDs typically compound quarterly).
Worked Examples
Example 1 u2014 Quarterly compounding
₹1,00,000 at 8% for 5 years, compounded quarterly ≈ ₹1,48,595.
Example 2 u2014 Compounding frequency matters
The same ₹1,00,000 at 8% for 5 years: yearly compounding gives ≈ ₹1,46,933, while monthly gives ≈ ₹1,48,985. More frequent compounding earns slightly more at the same rate.
Example 3 u2014 Simple vs. compound
At 8% simple interest, ₹1,00,000 over 5 years earns a flat ₹40,000 (₹1,40,000 total) — less than any compounding option, because simple interest never earns interest on interest.
Definitions
- Principal
- The initial amount you invest or deposit.
- Annual Rate
- The nominal yearly interest rate.
- Compounding Frequency
- How often interest is added to the balance — annually, half-yearly, quarterly, or monthly. Indian bank FDs typically compound quarterly.
- Interest Type
- Compound interest earns interest on accumulated interest; simple interest is charged only on the original principal.
How to Use
- Enter the principal amount.
- Enter the annual interest rate.
- Enter the duration in years.
- Choose the compounding frequency (or switch to simple interest).
- Read the interest earned and final maturity amount.