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Find the final amount on any principal with yearly, quarterly, monthly or daily compounding, and see how much more it earns than simple interest would.
Final amount
โน7,32,807.36
Interest
โน6,32,807.36
Compound interest results are estimates for planning and should be checked against current official rules or professional advice where applicable.
Compound interest is interest earned on your original amount plus the interest already added to it. That is why money grows faster the longer you leave it alone. This compound interest calculator gives the final amount for any principal, rate, period and compounding frequency.
A = P x (1 + r/n)^(n x t)
It matters, but less than most people think. Here is Rs 1,00,000 at 8% a year for 5 years, compounded at different intervals. Simple interest is included as a baseline.
| Method | Final amount | Interest earned |
|---|---|---|
| Simple interest | Rs 1,40,000 | Rs 40,000 |
| Compounded yearly | Rs 1,46,933 | Rs 46,933 |
| Compounded quarterly | Rs 1,48,595 | Rs 48,595 |
| Compounded monthly | Rs 1,48,985 | Rs 48,985 |
Switching from yearly to monthly compounding adds about Rs 2,052. Switching from simple to compound interest adds far more. The bigger levers are the rate and, above all, time.
Leave the same Rs 1,00,000 at 8%, compounded yearly, and watch what extra years do. After 10 years it becomes about Rs 2,15,892. After 20 years it reaches Rs 4,66,096. After 30 years it crosses Rs 10 lakh, at roughly Rs 10,06,266. The last decade adds more than the first two combined.
Divide 72 by the annual rate to estimate how many years money takes to double. At 8%, that is about nine years. At 12%, it is about six. Use this to sanity-check any figure a calculator gives you.
Indian banks usually compound cumulative fixed deposits quarterly. Credit card balances work the other way, as unpaid interest gets added and charged again. The same formula that grows savings also grows debt.
One caution: the result ignores tax and inflation. FD interest is taxed at your slab rate, which trims real growth. The ToolsMate inflation calculator can show what the final amount is worth in today's money, giving a more honest picture.
Enter the rate exactly as the bank quotes it, then pick the matching frequency. If an FD quotes 7.25% compounded quarterly, choose quarterly rather than yearly. Mismatching the two is the most common reason a result differs from the bank's maturity figure.
Use the fields in the tool above and keep units and formats consistent.
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Confirm that the result matches your situation before using it for a decision.
A = P(1 + r/n)^(nt).This describes the core logic used by the tool. Check any assumptions that may affect your result.
Use accurate inputs and keep units consistent.
Review the assumptions before using the result for a decision.
Compare important results with an independent or official source.
Simple interest is charged only on the principal. Compound interest is charged on the principal plus interest already earned. On Rs 1 lakh at 8% for 5 years, simple interest earns Rs 40,000. Yearly compounding earns about Rs 46,933.
Divide the annual rate by 12 and multiply the number of years by 12. Then use A = P x (1 + r/12)^(12t). For Rs 1 lakh at 8% over 5 years, the final amount is about Rs 1,48,985.
Most Indian banks compound interest quarterly on cumulative fixed deposits. Non-cumulative deposits pay interest out monthly or quarterly instead, so nothing compounds inside the FD. Read the bank's terms, as some small finance banks follow different intervals.
It is the true yearly return once compounding is included. An 8% rate compounded monthly works out to about 8.30% a year. Comparing effective rates lets you judge offers with different compounding intervals on equal terms.
Only slightly. Over 5 years at 8%, Rs 1 lakh grows to about Rs 1,49,176 with daily compounding. Monthly compounding gives Rs 1,48,985. That gap of roughly Rs 191 is small next to the effect of rate and time.
Roughly 10.3 years using the Rule of 72. The exact answer with yearly compounding is about 10.24 years. Higher rates shorten the wait considerably, so money at 9% doubles in a little over eight years.
It can. Credit cards are the clearest case, since unpaid interest joins your balance and gets charged again. Standard EMI loans charge interest on the reducing principal instead. Paying every EMI on time stops interest piling up on interest.
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