Compound Interest Calculator — Daily, Monthly, Yearly
Calculate how compound interest grows your investment over time with different compounding frequencies and see a year-by-year breakdown.
Final Amount
₹1,48,595
Total Interest
₹48,595
Principal
₹1,00,000
| Year | Principal (₹) | Interest Earned (₹) | Balance (₹) |
|---|---|---|---|
| 1 | ₹1,00,000 | ₹8,243 | ₹1,08,243 |
| 2 | ₹1,00,000 | ₹17,166 | ₹1,17,166 |
| 3 | ₹1,00,000 | ₹26,824 | ₹1,26,824 |
| 4 | ₹1,00,000 | ₹37,279 | ₹1,37,279 |
| 5 | ₹1,00,000 | ₹48,595 | ₹1,48,595 |
How to Use the Compound Interest Calculator
- Enter your initial principal amount.
- Set the annual interest rate (%).
- Select the compounding frequency (daily, monthly, quarterly, semi-annually, or annually).
- Enter the investment duration in years.
- View the final amount, total interest, and year-by-year breakdown table.
Compound Interest Formula
- A = Final amount
- P = Principal
- r = Annual interest rate (decimal)
- n = Compounding frequency per year
- t = Time in years
The Power of Compound Interest
Albert Einstein reportedly called compound interest "the eighth wonder of the world." The reason is simple: compound interest earns interest on interest, creating exponential growth that accelerates over time.
The key variables in compound interest are time, rate, and frequency. Starting early is often more impactful than the rate itself. An investor who starts at age 25 with Rs. 1 lakh at 8% will have significantly more at retirement than someone who starts at 35 with the same amount, even at a higher rate.
Compounding frequency matters too. Daily compounding on the same principal and rate produces more than monthly, which produces more than quarterly. For most savings accounts and FDs in India, quarterly compounding is standard, while some high-yield savings accounts offer monthly compounding.
Frequently Asked Questions
What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest, it grows exponentially over time.
How does compounding frequency affect returns?
More frequent compounding means slightly higher returns. Daily compounding yields marginally more than monthly, which yields more than annually. The difference grows larger over longer periods.
What is the Rule of 72?
The Rule of 72 estimates how long it takes to double your money: divide 72 by your annual interest rate. At 8% annual return, your money doubles in roughly 9 years (72 / 8 = 9).