Compound Interest Calculator

What This Compound Interest Calculator Does

Compound interest is interest calculated not just on your original principal, but also on the interest that principal has already earned - the mechanism behind almost all long-term investment growth. This calculator shows how a principal amount grows at a given rate, with your choice of how often the interest compounds.

The Formula

A = P × (1 + r/n)^(n×t), where P is the principal, r is the annual interest rate, n is the number of times interest compounds per year, and t is the time in years. The interest earned is simply A minus P. More frequent compounding (monthly versus annually, for instance) produces a slightly higher final amount for the same stated annual rate.

How to Use It

Enter your principal amount, the annual interest rate, the number of years, and choose a compounding frequency - annually, semi-annually, quarterly, or monthly. The results show your original principal, the interest earned on top of it, and the total maturity amount.

Why Compounding Frequency Matters

The same 8% annual rate produces a different result depending on whether it compounds once a year or twelve times a year, because interest starts earning its own interest sooner with more frequent compounding. The difference is usually small for short periods but becomes noticeable over a decade or more - try switching the frequency dropdown to see it directly.

Who This Is For

Anyone who wants to understand or compare fixed-rate compounding growth in general - useful as a building block for understanding FDs, bonds, or any product that advertises a stated annual interest rate with a specific compounding frequency.

Quick Example

₹2,00,000 at 9% annual interest, compounded quarterly, grows to approximately ₹3,41,153 after 6 years - about ₹1,41,153 in interest, noticeably more than the ₹1,08,000 the same principal and rate would earn under simple interest over the same period.