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Compound interest calculator
Interest on interest: growth with yearly, quarterly or monthly compounding.
Quick answer
Enter the principal, the rate, the years and how often it compounds. ₹1,00,000 at 10% for 5 years compounded yearly becomes ₹1,61,051.
Amount after the period
₹1,61,051
- Principal
- ₹1,00,000
- Compound interest earned
- ₹61,051
- Simple interest would give
- ₹50,000
- Invested
- Gain
Year-by-year table
| Year | Invested so far | Gain so far | Balance |
|---|---|---|---|
| 1 | ₹1,00,000 | ₹10,000 | ₹1,10,000 |
| 2 | ₹1,00,000 | ₹21,000 | ₹1,21,000 |
| 3 | ₹1,00,000 | ₹33,100 | ₹1,33,100 |
| 4 | ₹1,00,000 | ₹46,410 | ₹1,46,410 |
| 5 | ₹1,00,000 | ₹61,051 | ₹1,61,051 |
How it works
With compound interest, each period’s interest is added to the balance, so the next period earns interest on a bigger sum.
The more often interest compounds, the slightly more you earn; the bigger lever is time.
The last number compares with simple interest so you can see the extra that compounding adds.
The formula
- A = P × (1 + r ÷ m)^(m × t)
- P = principal, r = yearly rate ÷ 100, m = times compounded per year, t = years
A worked example
₹1,00,000 at 10% for 5 years compounded yearly: 1,00,000 × 1.10^5 = ₹1,61,051. Simple interest would give only ₹50,000.
Common questions
What is the difference between simple and compound interest?
Simple interest is charged only on the original sum. Compound interest is charged on the sum plus the interest already added.
Does compounding more often matter much?
A little. Going from yearly to monthly adds a modest amount; the number of years and the rate matter far more.
Can I use it for a loan?
Yes, for a loan where interest is added to the balance and nothing is repaid. For EMIs use the EMI calculator.
What is the effective annual rate?
The true yearly growth after compounding. A 10% rate compounded monthly is about 10.47% a year.