Compound Interest Calculator
Watch one amount grow two very different ways. Slide between compound and simple interest and see how much of the final value is interest earning interest.
Interest on interest does the work.
Keep the amount and rate fixed and stretch the time period from 10 to 30 years. In compound mode the green part of the bar — the interest — overtakes your original money and keeps running away from it. Switch to simple mode and the same money grows in a straight line. That gap is the whole story.
- Compound — each year’s interest is added to the principal, so it earns interest too.
- Simple — interest is paid on the original amount only, every year.
Illustration only. Assumes a constant rate compounded yearly; real interest rates change over time and returns are not guaranteed.
| Year | Principal | Interest | Value |
|---|
The formula behind the numbers
P = principal · r = annual rate ÷ 100 · t = years
Example: ₹1,00,000 at 8% a year for 10 years grows to about ₹2,15,892 — ₹1,00,000 of your money and ₹1,15,892 of interest.
P = principal · r = annual rate ÷ 100 · t = years
The same ₹1,00,000 at 8% for 10 years earns just ₹80,000 as simple interest — ₹35,892 less, purely because the interest never got reinvested. To compare the year-on-year growth rate of any two investments, see What is CAGR? For investing month by month instead, try the SIP calculator.
Frequently asked questions
How does this compound interest calculator work?
It applies the standard compound interest formula A = P × (1 + r)t, where P is the amount you invest, r is the annual interest rate and t is the number of years. Interest is added to the principal once a year, so each year the interest itself earns interest.
What is the difference between simple and compound interest?
Simple interest is calculated only on the original amount every year, so the interest is the same each year. Compound interest is calculated on the original amount plus all the interest already added, so the yearly interest keeps growing. Over long periods the gap becomes very large.
How often does this calculator compound?
Yearly, which keeps the maths transparent. Real fixed deposits usually compound quarterly, which makes their maturity slightly higher than this tool shows at the same rate.
What is the Rule of 72?
A mental shortcut: divide 72 by the annual interest rate to estimate how many years your money takes to double. At 8% it is about 9 years; at 12% about 6 years.
Where do I earn compound interest in real life?
Fixed deposits, PPF, Sukanya Samriddhi and recurring deposits pay fixed compound interest. Mutual funds also compound, but at a market return that changes every year rather than a fixed rate.
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