📈 Formula: A = P(1+r/n)^nt📅 Year-by-Year Table⚡ Live Calculation
Compound Interest Calculator
Calculate compound interest with annual, quarterly, monthly or daily compounding. See year-by-year growth and compare with simple interest.
Principal Amount
₹
Annual Interest Rate
1%30%
Time Period
1 yr40 yrs
Compounding Frequency
Total Amount (Principal + Interest)
₹0
at 10% p.a. compounded annually for 10 years
Principal
₹0
Total Interest
₹0
Wealth Multiple
0x
Interest as % of Principal
0%
Effective Annual Rate
0%
Compounding
Annual
📝 Formula
A = P × (1 + r/n)^(n×t)
A = Final Amount | P = Principal | r = Annual rate (decimal) | n = Compounding periods/year | t = Time in years Interest = A − P | EAR = (1 + r/n)^n − 1
Compound Interest vs Simple Interest Comparison
Simple Interest (SI = P×R×T/100)₹0
Compound Interest₹0
Extra earned with CI over SI₹0
SI Total Amount₹0
CI Total Amount₹0
Principal vs Compound Growth vs Simple Interest
Compound Interest
Simple Interest
Principal
Year-by-Year Growth Table▼ Show All
Year
Opening Balance
Interest Earned
Closing Balance
ⓘ Compound interest calculations are for illustrative purposes. Actual returns may vary based on the specific financial product, taxes applicable, and other charges. Consult a financial advisor before making investment decisions.
Frequently Asked Questions
What is compound interest? +
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest which only calculates on the original principal, compound interest causes exponential growth — interest earns interest — making it the fundamental engine of long-term wealth creation.
What is the compound interest formula? +
A = P × (1 + r/n)^(n×t), where A is the final amount, P is the principal, r is the annual interest rate as a decimal, n is the number of compounding periods per year (1=annual, 4=quarterly, 12=monthly, 365=daily), and t is the time in years. Interest earned = A − P.
How is compound interest different from simple interest? +
Simple interest (SI = P×R×T/100) is calculated only on the original principal each year. Compound interest recalculates on the growing balance. On ₹1 lakh at 10% for 10 years: SI gives ₹1 lakh interest (₹2L total), while CI gives ₹1.59 lakh interest (₹2.59L total) when compounded annually. The longer the term, the larger the gap.
Which compounding frequency gives the highest return? +
Daily compounding gives the highest return, followed by monthly, quarterly, semi-annual, and annual. However, the difference between daily and monthly is negligible. For a ₹1L investment at 10% for 10 years: Annual = ₹2,59,374 | Quarterly = ₹2,68,506 | Monthly = ₹2,70,704 | Daily = ₹2,71,791.
What is the Effective Annual Rate (EAR)? +
EAR = (1 + r/n)^n − 1. It represents the actual annual return after accounting for intra-year compounding. A 12% nominal rate compounded monthly gives EAR = 12.68%. EAR is always ≥ nominal rate, and they're equal only when compounding is annual.
How long does it take to double money with compound interest? +
Use the Rule of 72: Years to double ≈ 72 ÷ Annual Interest Rate. At 8% annually, money doubles in ~9 years. At 12%, it doubles in ~6 years. At 6% (savings account), it takes ~12 years. This rule only works for compound interest — with simple interest, doubling takes exactly 100/R years.