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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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.

Frequently Asked Questions

Why does quarterly compounding earn more than annual compounding at the same rate?

Because interest is added to the principal more often, so subsequent interest is calculated on a slightly larger base sooner u2014 more compounding periods at the same nominal rate always produce a higher effective return.

What compounding frequency do Indian bank FDs use?

Most Indian bank fixed deposits compound quarterly, though this can vary by bank and product u2014 always check your specific FD's terms.

When would I use simple interest instead?

Simple interest applies when interest is calculated only on the original principal throughout, never on accumulated interest u2014 some short-term loans and a few specific instruments use this method.