Compound Interest Calculator
Calculate how your investments grow over time with compound interest. See the impact of different compounding frequencies on your returns.
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Did you know?
If you invested ₹1,00,000 at 8.00% interest compounded annually for 10 years, you would earn ... in interest!
Understanding Compound Interest
Compound interest is the interest calculated on the initial principal and also on the accumulated interest over previous periods. It's the result of reinvesting interest, rather than paying it out, so that interest in the next period is earned on the principal sum plus previously accumulated interest.
The Compound Interest Formula
The formula for compound interest is:
A = P(1 + r/n)^(nt)
Where:
A = Final amount
P = Principal (initial investment)
r = Annual interest rate (decimal)
n = Number of times interest is compounded per year
t = Time (in years)
Compounding Frequency
The frequency of compounding can significantly impact your returns over time:
- Annually: Interest is calculated once per year
- Semi-annually: Interest is calculated twice per year
- Quarterly: Interest is calculated four times per year
- Monthly: Interest is calculated 12 times per year
- Daily: Interest is calculated 365 times per year
The Power of Compound Interest
Compound interest is often called the "eighth wonder of the world" because of its ability to generate wealth over time. The longer you leave your money invested, the more powerful the compounding effect becomes.
This calculator helps you visualize how your money can grow with compound interest and how different compounding frequencies affect your returns.