Compound Interest Calculator

Calculate how your savings or investments grow over time with compound interest

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Adjust the inputs and click Calculate.

Frequently Asked Questions

Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. Unlike simple interest, which only earns on the principal, compound interest causes your money to grow exponentially over time — the "interest on interest" effect.

The standard formula is: A = P × (1 + r/n)nt
Where: A = Final amount, P = Principal, r = Annual interest rate (decimal), n = Compounding frequency per year, t = Time in years.
Total interest earned = A − P.

The more frequently interest is compounded, the more you earn. For example, monthly compounding yields more than annual compounding at the same rate. Daily compounding gives the maximum benefit for a given rate. The difference becomes more noticeable over longer time horizons.

The Effective Annual Rate (EAR), also called Annual Equivalent Rate (AER), is the actual return per year after accounting for compounding within the year. It is calculated as: EAR = (1 + r/n)n − 1. It lets you compare products with different compounding frequencies on equal terms.

The Rule of 72 is a quick mental shortcut: divide 72 by the annual interest rate (in %) to estimate how many years it takes for your money to double. For example, at 8% per year, your money doubles in approximately 72 ÷ 8 = 9 years.

Yes. You can enter an optional annual contribution to simulate regular savings or investment deposits made at the start of each year. This is useful for modelling SIP-style or recurring deposit scenarios alongside the initial lump sum.

Simple interest is calculated only on the original principal: I = P × r × t. Compound interest is calculated on the principal plus previously earned interest, leading to exponential growth. Over time, compound interest yields significantly more than simple interest at the same rate.

Yes. Fixed deposits typically compound quarterly or annually. Select the appropriate compounding frequency to match your FD scheme. Enter the principal, FD interest rate, and tenure to get the maturity amount and total interest earned.

The difference between daily and monthly compounding is small in practice. At 8% annual rate on $10,000 for 10 years, daily compounding yields approximately $22,253 versus $22,196 for monthly — a difference of just $57. The gap grows with higher rates and longer periods, but for most savings goals the practical impact is modest. The frequency matters most when comparing annual vs. more frequent compounding.

The Rule of 72 lets you quickly estimate doubling time without a calculator: divide 72 by the annual return percentage. At 6%, money doubles in ~12 years; at 9%, in ~8 years; at 12%, in ~6 years. It also works in reverse — if you want to double your money in 10 years, you need roughly a 7.2% annual return. Use this rule as a quick sanity check when comparing investment options.

About This Compound Interest Calculator

This free online compound interest calculator helps you estimate how your savings, investments, or fixed deposits grow over time. Enter your principal, annual interest rate, time horizon, compounding frequency, and optional annual contributions to instantly see your final balance, total interest earned, and a year-by-year breakdown.

Compound interest is the foundation of long-term wealth creation. Whether you are planning for retirement, building an emergency fund, or evaluating fixed deposit returns, understanding how compounding works is essential. Use this tool to compare different rates, tenures, and compounding frequencies side by side.

When to use this calculator

  • Estimating growth of savings accounts and fixed deposits
  • Planning long-term investments and retirement corpus
  • Comparing annual vs monthly vs daily compounding
  • Understanding the impact of regular contributions over time

Standards & References

Related Calculators

Simple Interest
SIP Calculator
FD Calculator
Percentage Calculator

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