Compound Interest Calculator.

Calculate how your money grows over time with compound interest. See a complete year-by-year breakdown.

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How to calculate compound interest

  1. Enter your starting principal.
  2. Set the annual interest rate and how often it compounds.
  3. Set the number of years, and a monthly contribution if you plan to keep adding.
  4. Read the maturity value and the year-by-year breakdown beneath the chart.

About Compound Interest

Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest (which is calculated only on principal), compound interest grows exponentially — the longer the time horizon, the more dramatic the effect.

The formula is: A = P(1 + r/n)^(nt), where P = principal, r = annual rate (decimal), n = compounding periods per year, t = years.

More frequent compounding (daily vs. annually) produces slightly higher returns due to more frequent reinvestment of earned interest.

How much does the frequency actually matter? Take ₹1,00,000 at 10% for 10 years. Compounded annually it becomes ₹2,59,374; quarterly, ₹2,68,506; monthly, ₹2,70,704; daily, ₹2,71,791. So moving from annual to daily compounding is worth ₹12,417 — real money — but moving from monthly to daily adds only ₹1,087, under half a percent. The rate and the time horizon decide the outcome; the compounding frequency is a rounding detail beside them.

Frequently Asked Questions

How is compound interest calculated?

With A = P(1 + r/n)^(nt), where P is the principal, r the annual rate, n the number of compounding periods a year and t the years. $100,000 at 8% compounded yearly for 10 years grows to $215,892.

How much difference does compounding frequency make?

Some, but less than the rate or the time. The same $100,000 at 8% for 10 years becomes $215,892 compounded yearly, $221,964 monthly and $222,535 daily. Moving from yearly to monthly adds about 2.8%; from monthly to daily adds only a further 0.3%.

What is the rule of 72?

A quick estimate of doubling time: divide 72 by the annual rate. At 8%, money doubles in about 9 years; the exact figure is 9.01 years. The rule is most accurate for rates between about 6% and 10%.

How do regular contributions change the result?

Each contribution compounds for the time it is invested, so early deposits do most of the work. The calculator adds a monthly contribution to the growth of the lump sum and shows how much of the final value came from contributions and how much from interest.

Sources · Reviewed

  • Compound interest, A = P(1 + r/n)^(nt), with periodic contributions

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