Compound Interest Calculator
Discover the power of compounding! Calculate how your investments can grow over time with compound interest - the eighth wonder of the world.
Calculate Compound Interest
Enter your investment details to see the magic of compounding
Investment Growth
Enter investment details
to see compounding results
The Power of Compound Interest
Exponential Growth
Your money grows faster over time as you earn interest on both your principal and accumulated interest.
Time is Key
The longer you stay invested, the more powerful compounding becomes. Start early to maximize returns.
Frequency Matters
More frequent compounding (daily vs annually) can significantly boost your overall returns over time.
Wealth Building
Compound interest is the most effective way to build long-term wealth and achieve financial goals.
The Early Bird Advantage
If you invest ₹10,000 per year starting at age 25 with 8% return:
- • By age 65: ₹29,90,000 (You invested only ₹4,00,000)
- • Wealth created: ₹25,90,000 through compounding
Frequency Impact
₹1,00,000 at 8% for 10 years:
- • Annual compounding: ₹2,15,892
- • Monthly compounding: ₹2,21,964
- • Daily compounding: ₹2,22,534
Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on the initial principal and also on the accumulated interest of previous periods. It's often called "interest on interest" and makes your money grow faster over time.
How is compound interest calculated?
The formula for compound interest is: A = P(1 + r/n)^(nt) where A = final amount, P = principal, r = annual interest rate, n = compounding frequency, and t = time in years.
What's the difference between simple and compound interest?
Simple interest is calculated only on the principal amount, while compound interest is calculated on both principal and accumulated interest. Compound interest yields higher returns over long periods.
How does compounding frequency affect returns?
More frequent compounding (daily, monthly) results in higher returns because interest is calculated and added to the principal more often, leading to more "interest on interest" cycles.
What is the Rule of 72?
The Rule of 72 is a quick formula to estimate how long it takes for an investment to double: Divide 72 by the annual interest rate. For example, at 8% return, your money doubles in approximately 9 years (72 ÷ 8 = 9).