Compound Interest Calculator
Calculate compound interest on investments or loans with our free online CI calculator. Compare different compounding frequencies and see the power of compounding.
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Enter Investment Details
Principal vs Interest
Principal Amount
₹1,00,000
Compound Interest
₹46,933
Total Amount
₹1,46,933
Effective Rate
8.00%
Power of Compounding
Compound Interest Formula
A = P × (1 + r/n)^(n×t)
Where P = Principal, r = Rate, n = Compounding frequency, t = Time
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What is Compound Interest?
Compound Interest (CI) is the interest calculated on both the initial principal and the accumulated interest from previous periods. Often called "interest on interest," compounding makes your money grow exponentially over time. This is why Albert Einstein reportedly called it the "eighth wonder of the world."
Most bank deposits, mutual funds, and investments use compound interest, which is why starting early with investments can lead to significantly higher wealth accumulation.
Compound Interest Formula
A = P × (1 + r/n)^(n×t)
- A = Final Amount (Principal + Interest)
- P = Principal (Initial Amount)
- r = Annual Interest Rate (decimal)
- n = Number of times interest is compounded per year
- t = Time in years
CI = A - P = P × [(1 + r/n)^(n×t) - 1]
Compounding Frequency Impact
Example: ₹1,00,000 at 10% for 5 years
| Frequency | Final Amount | Interest Earned |
|---|---|---|
| Yearly | ₹1,61,051 | ₹61,051 |
| Half-Yearly | ₹1,62,890 | ₹62,890 |
| Quarterly | ₹1,63,862 | ₹63,862 |
| Monthly | ₹1,64,531 | ₹64,531 |
| Daily | ₹1,64,866 | ₹64,866 |
Rule of 72
The Rule of 72 is a quick way to estimate how long it takes to double your money with compound interest:
Years to Double = 72 / Interest Rate
- At 8% interest: 72/8 = 9 years to double
- At 12% interest: 72/12 = 6 years to double
- At 15% interest: 72/15 = 4.8 years to double
Power of Starting Early
Due to compounding, starting early makes a huge difference. If you invest ₹10,000 monthly:
- Starting at 25: ₹3.5 Cr by 60 (at 12% return)
- Starting at 35: ₹1.0 Cr by 60
- Starting at 45: ₹30 L by 60
Frequently Asked Questions
Disclaimer
This calculator is provided for informational purposes only. The results are estimates and should not be considered as financial advice. Actual values may vary based on various factors. Please consult a certified financial advisor before making any financial decisions.
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