Compound Interest Calculator
See the power of compounding for any principal, rate, tenure, and compounding frequency. Compare against simple interest to feel the difference Einstein called the 'eighth wonder of the world'.
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What is compound interest?
Compound interest is interest earned not just on the principal, but also on the interest already accumulated. Each compounding period, today's interest becomes tomorrow's principal. Over long horizons this creates exponential growth — the same force behind every retirement plan, every SIP, every multi-bagger stock story.
The compound-interest formula
A = P × (1 + r/n)n × t- A = final amount
- P = principal
- r = annual rate (decimal)
- n = compounding frequency per year
- t = time in years
The Rule of 72
A handy mental shortcut: divide 72 by the annual rate to get the years your money takes to double. At 12%, money doubles every 6 years. At 8%, every 9 years. At 6%, every 12 years. Three points of CAGR difference cuts the doubling time by a third over decades.
Simple vs compound — a real example
₹1,00,000 at 10% for 20 years:
- Simple interest (interest on principal only): ₹1,00,000 + ₹2,00,000 = ₹3,00,000.
- Compound interest (monthly compounding): ₹7,32,800 — more than double the simple-interest result.
Where compounding helps you in India
- SIPs — every NAV unit you buy compounds via fund-manager reinvestment.
- PPF / EPF / NPS — annual interest is credited and compounded next year.
- Stocks with retained earnings — companies reinvest profits which then earn more profit.
- Cumulative FDs — interest is reinvested quarterly inside the deposit.
Where compounding hurts you
- Credit-card debt — 36–42% APR compounded monthly. Pay it off first, always.
- Personal loans rolled over.
- Lifestyle inflation — each ₹5,000/month luxury habit is a ₹50L+ retirement corpus over 30 years at 10%.