Calculate compound interest on investments
Built & maintained by Pappu Venkata Subbi Reddy, founder of Clacify · Updated July 2026 · Formulas verified against official Indian government sources
The Compound Interest Calculator shows how an investment grows when interest earns interest over time. Unlike simple interest, which is charged only on the original principal, compound interest is added back to the balance each period so the next period's interest is calculated on a larger amount. Enter your principal, the annual rate, the number of years, and the compounding frequency, and it returns the maturity value and total interest earned. It's the single most important concept in personal finance — the engine behind SIPs, PPF, FDs, and long-term wealth.
Compound interest uses the formula A = P × (1 + r/n)^(n×t), where P is the principal, r is the annual rate (as a decimal), n is the number of times interest compounds per year, and t is the number of years. The maturity value A includes both principal and interest; total interest = A − P. The more frequently interest compounds (monthly vs annually), the higher the final amount for the same headline rate. Over long periods the effect is dramatic, because each year's growth is calculated on an ever-larger base. All calculations run locally in your browser.
| Rate | After 5 yrs | After 10 yrs | After 15 yrs | After 20 yrs |
|---|---|---|---|---|
| 7% | ₹1,40,255 | ₹1,96,715 | ₹2,75,903 | ₹3,86,968 |
| 8% | ₹1,46,933 | ₹2,15,892 | ₹3,17,217 | ₹4,66,096 |
| 10% | ₹1,61,051 | ₹2,59,374 | ₹4,17,725 | ₹6,72,750 |
At 10%, ₹1 lakh becomes nearly ₹6.73 lakh in 20 years — and notice how the gap between rows widens over time. That widening is compounding: a small difference in rate becomes a large difference in outcome the longer you stay invested.
Divide 72 by the annual rate to estimate how many years it takes your money to double. At 8%, that's 72 ÷ 8 = 9 years; at 12%, just 6 years. It's a quick mental check that reveals why rate and time matter so much: money doubling every 6 years instead of 9 means several extra doublings over a working life, which is the difference between a comfortable retirement and a modest one.
For the same annual rate, more frequent compounding produces a higher maturity value, because interest starts earning interest sooner. ₹1,00,000 at 8% for 10 years grows to about ₹2,15,892 with annual compounding but roughly ₹2,21,964 with monthly compounding. Indian banks typically compound FDs quarterly; savings accounts pay interest quarterly too. When comparing products, check the compounding frequency, not just the headline rate.
Because compounding rewards time exponentially, the number of years you stay invested usually matters more than squeezing out an extra percent of return. An investor who starts at 25 and stops at 35 often ends up with more than one who starts at 35 and invests until 60 — despite investing for fewer years — purely because the early money compounds for longer. This is the mathematical case for starting to invest as early as possible, even with small amounts.
Compound interest formula: A = P × (1 + r/n)^(nt). CI earned = A − P. Example: ₹1 lakh at 8% compounded quarterly for 5 years: A = 1,00,000 × (1 + 0.08/4)^(4×5) = ₹1,48,451. Interest earned = ₹48,451.
Simple Interest (SI) is calculated only on the principal: SI = P × r × t. Compound Interest (CI) is calculated on the principal plus accumulated interest — you earn "interest on interest." Over 10 years, ₹1 lakh at 8% earns ₹80,000 as SI but ₹1,15,892 as CI (annual compounding) — a difference of ₹35,892.