Compound Interest Calculator — CI with Year-Wise Growth
Calculate compound interest on any principal with monthly, quarterly, half-yearly, or annual compounding. Enter your amount, rate, tenure, and frequency to get total amount, interest earned, effective annual rate, and a year-wise growth table. Also shows simple vs compound interest comparison to visualise the power of compounding. Works for FDs, PPF, loans, and investments.
Calculate Compound Interest
How to Use the Compound Interest Calculator
This tool calculates compound interest using the standard formula used by banks, NBFCs, and financial institutions regulated by the Reserve Bank of India.
Step 1 — Enter Principal, Rate, and Period
Set your investment amount, annual interest rate, and number of years using sliders or direct input.
Step 2 — Select Compounding Frequency
Choose Monthly (12x/year), Quarterly (4x — most FDs), Half-Yearly (2x), or Yearly (1x — PPF). Higher frequency = slightly more interest.
Step 3 — View Results
Get maturity amount, total interest, effective annual rate, visual principal-vs-interest bar, year-wise growth table, and simple vs compound interest comparison.
CA Tip: The Rule of 72 is a quick estimate: divide 72 by the interest rate to get doubling time. At 8% it takes ~9 years to double. At 12% about 6 years. The ICAI recommends understanding compounding for accurate financial planning and tax computation on accrued interest.
Compound Interest Formulas
A = P × (1 + r/n)n×t
CI = A − P
Simple Interest Formula:
SI = P × r × t
Effective Annual Rate:
EAR = (1 + r/n)n − 1
Where: P = Principal, r = Annual rate (decimal), n = Compounding frequency/year, t = Years
Example (₹10L, 8%, 5 yrs, quarterly):
A = 10,00,000 × (1 + 0.08/4)4×5 = 10,00,000 × 1.4859
A = ₹14,85,947 | CI = ₹4,85,947
EAR = (1.02)4 − 1 = 8.24%
Compound vs Simple Interest — The Power of Compounding
| Years | Simple Interest (8%) | Compound Interest (8% Quarterly) | Difference |
|---|---|---|---|
| 5 | ₹4,00,000 | ₹4,85,947 | ₹85,947 |
| 10 | ₹8,00,000 | ₹12,20,794 | ₹4,20,794 |
| 15 | ₹12,00,000 | ₹22,79,609 | ₹10,79,609 |
| 20 | ₹16,00,000 | ₹38,50,727 | ₹22,50,727 |
| 30 | ₹24,00,000 | ₹98,70,640 | ₹74,70,640 |
On ₹10 lakh at 8%, the difference between SI and CI grows from ₹86K in 5 years to a staggering ₹74.7 lakh in 30 years. This exponential growth is why starting early is the single most important financial decision.
Maximise the Power of Compounding
- Start early: 10 extra years of compounding can triple your wealth. A 25-year-old investing ₹5K/month will have far more at 60 than a 35-year-old investing ₹15K/month.
- Choose higher frequency: Monthly > Quarterly > Annual. The difference is small per year but adds up over decades.
- Reinvest returns: Choose growth/cumulative options over payout. Withdrawing interest breaks the compounding chain.
- Don’t interrupt: Breaking FDs or exiting investments mid-term resets compounding. Let time work for you.
- Use tax-free instruments: PPF at 7.1% tax-free compounds better than an 8% FD taxed at 30% (effective ~5.6%).
Expert Tip: The “real” power of compounding shows after year 10. In the first decade, most of your corpus is your own money. After that, your returns start generating more returns than your contributions. Be patient. Talk to our CA team →
Need financial planning help? Our CAs assist with investment planning, FD tax optimization, and long-term wealth creation strategies. Talk to a CA today →
