Compound Interest Calculator
See how your money grows exponentially over time with the power of compounding.
One Lakh Rupees
Eight Percent
Ten years
Nominal Total Value
₹2,21,964
Before inflation adjustment
Nominal Interest Earned
₹1,21,964
121.96% Absolute Return
Growth Trajectory
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Yearly Breakdown
Compound Interest Deep Dive
What is compound interest
Compound interest is interest calculated on the original amount and interest already added to it. When interest stays in the balance, later calculations use a larger base.
This calculator models a single starting amount at a constant annual rate. It shows the final value and the growth above your original principal. For monthly additions, use the SIP Calculator or Investment Calculator.
A worked example
Suppose ₹1,00,000 earns a fixed 8% a year for 10 years with annual compounding and no withdrawals. The calculated final value is ₹2,15,892, including ₹1,15,892 of interest, rounded to the nearest rupee.
Simple interest at the same rate for the same period would add ₹80,000. The additional ₹35,892 in the compound calculation comes from interest earning further interest.
Why starting earlier changes the result
At a fixed 8% annual rate, ₹1,00,000 becomes approximately ₹10.06 lakh after 30 years and ₹21.72 lakh after 40 years. The extra decade gives the accumulated balance another ten years to compound. This illustrates duration, rather than a promised investment outcome.
How Compound Interest Is Calculated
The compound interest formula
A is the final amount, P is the starting principal, r is the nominal annual rate as a decimal, m is the number of compounding periods per year and t is the duration in years. Compound interest equals A − P.
Monthly and annual compounding
For ₹50,000 at a nominal 12% for five years, annual compounding gives ₹88,117. Monthly compounding gives ₹90,835. These amounts are rounded to the nearest rupee.
Monthly compounding uses 1% each month. Its effective annual rate is (1.01)12 − 1, or 12.68%. Annual compounding at 12% has an effective annual rate of 12%. Frequency comparisons are meaningful only when the quoted rate convention is the same.
The Rule of 72
Divide 72 by the annual percentage rate for a rough doubling time. At 8%, the estimate is nine years; the exact annual-compounding result is about 9.01 years. The shortcut is less accurate for very low or high rates and does not include costs or tax.
Understanding the Projection
Deposits and market investments
A cumulative deposit may credit interest on a defined schedule. Check its product terms for the actual frequency, early-withdrawal rules and tax treatment.
Mutual funds and shares have variable returns. A fixed rate can illustrate compound growth, but it does not reproduce their actual price path. SEBI's compounding calculator also treats such results as illustrations. [1]
Inflation and purchasing power
Use a decimal inflation rate. To compare annual growth with annual inflation, use real return = (1 + nominal return) ÷ (1 + inflation) − 1. An 8% annual return and 6% inflation give a real return of about 1.89%, before tax and costs.
Reinvestment and cash withdrawals
The formula assumes all growth stays invested. Taking money out reduces the balance available to compound. A payout investment, repayment schedule or changing contribution stream needs a cash-flow model that includes those transactions.
Use the APY Calculator to compare effective annual yields, the Simple Interest Calculator for a fixed principal without compounding and the Inflation Impact Calculator to explore purchasing power.
Frequently Asked Questions
Can I add monthly contributions here?
Does more frequent compounding always produce a better product?
Are tax and fees included?
What happens at a zero interest rate?
Is compound interest the same as CAGR?
Assumptions and Disclaimer
The model assumes one principal, a constant rate, the selected compounding frequency and no contributions or withdrawals. Taxes, product charges, defaults and changing market returns are excluded. A provider may use a different day-count or rounding method.
This is education, not investment advice. Mutual fund investments are subject to market risks; read all scheme-related documents carefully. Past performance does not guarantee future results.
Sources and Review
Content reviewed on 26 October 2026.