Compound Interest Calculator (A = P(1 + r/n)^nt)
See how a lump-sum investment grows when interest is compounded at different frequencies. Supports tenures down to the month.
Total: 120 months
Result
Maturity Amount
₹2,20,804
Compound Interest
₹1,20,804
Simple Interest (ref)
₹80,000
Extra via compounding
₹40,804
Concept
Compound interest is interest calculated on both the initial principal and all previously accumulated interest. Unlike simple interest — which grows linearly — compound interest grows exponentially, making it the engine of long-term wealth creation.
Compounding frequency has a direct impact on returns. At the same nominal rate, monthly compounding yields more than quarterly, which in turn beats annual compounding. The more frequently interest is credited, the more often it begins earning interest of its own. At continuous compounding, the formula approaches A = Pert — the theoretical maximum.
The Rule of 72 offers a quick mental estimate: divide 72 by the annual interest rate to find approximately how many years it takes to double your money. For example, at 8% p.a. compounding annually, your investment doubles in roughly 72 ÷ 8 = 9 years.
Formula
Variables
A₹- Maturity amount — principal plus all compounded interest.
P₹- Principal — the initial lump sum invested.
r- Annual interest rate as a decimal, e.g. 8% = 0.08.
n- Compounding frequency per year — 1 annual, 2 half-yearly, 4 quarterly, 12 monthly, 365 daily.
t- Investment duration in years as a decimal (months are auto-converted).