Compound Interest Calculator
Calculate how a lump-sum investment grows with the power of compounding, at any compounding frequency.
Principal Amount (₹)
₹
Annual Interest Rate (%)
%
Time Period (Years)
Yr
Compounding Frequency
Total Value
₹ 2,59,374
Principal
₹ 1,00,000
Interest Earned
₹ 1,59,374
What is compound interest?
Compound interest is interest calculated on both the original principal and the interest already accumulated from previous periods — often summarized as "earning interest on interest." The more frequently interest compounds (daily vs. annually, for example), the faster the balance grows for the same nominal rate.
The power of compounding
Because each period's interest gets added back to the principal, growth accelerates over time rather than staying flat — the effect becomes dramatic over long horizons like 15-30 years, which is why starting early matters more than the exact amount invested.
Formula
P = principal, r = annual rate, n = compounds per year, t = years
Example
₹1,00,000 invested at 10% annual interest, compounded annually for 10 years, grows to roughly ₹2,59,374 — of which ₹1,59,374 is compounded interest, more than the original principal itself.
Common Use Cases
- Projecting how a fixed deposit or lump-sum investment grows over time.
- Comparing how compounding frequency (annual vs. monthly vs. daily) changes the final amount.
- Understanding why starting to invest early has an outsized long-term effect.
FAQs
Does compounding frequency really make a big difference?
At the same nominal rate, more frequent compounding (e.g. monthly vs. annually) produces a slightly higher return, but the difference is modest — the bigger levers are the rate itself and how long the money stays invested.
Is this the same as a SIP calculator?
No — this tool models a single lump-sum investment. For regular monthly contributions, use the SIP Calculator instead.