How to use the Compound Interest Calculator
- Enter the principal amount.
- Enter the yearly interest rate and the time in years.
- Choose how often interest is compounded to see the final amount.
About this tool
With compound interest, the interest earned in each period is added to the principal, so the next period’s interest is calculated on a bigger amount. The formula is A = P × (1 + r/n)n × t and compound interest = A − P, where P is the principal, r the yearly rate as a decimal, n the number of times interest is compounded each year and t the time in years.
For example, ₹1,00,000 at 8% compounded yearly for 10 years becomes ₹2,15,892 — ₹1,15,892 of interest, compared with ₹80,000 of simple interest. The more often interest is compounded, and the longer you stay invested, the bigger the difference. A quick rule of thumb: money doubles in about 72 ÷ rate years.
Frequently asked questions
What is the formula for compound interest?
A = P(1 + r/n)^(nt). Compound interest is A minus P.
What is compound interest on ₹1 lakh at 8% for 10 years?
Compounded yearly, the amount becomes ₹2,15,892, so the compound interest is ₹1,15,892.
Is monthly compounding better than yearly?
Yes, for the same rate. More frequent compounding means interest starts earning interest sooner, so the final amount is slightly higher.