How it works
Enter the starting amount, the yearly interest rate and the time period. The period can be in years or months, and part years such as 2.5 are fine.
Choose how often interest is added: monthly, quarterly, half-yearly or yearly.
The result shows the final amount, the compound interest earned, and how much more that is than simple interest on the same amount.
The formula
A = P × (1 + r ÷ n) ^ (n × t)
P is the principal, r is the yearly rate as a decimal, n is how many times a year interest is added, and t is the time in years. Compound interest is A minus P. Simple interest, for comparison, is P × r × t.
A worked example
A principal of ₹50,000 at 8% a year, compounded yearly for 10 years, grows to about ₹1,07,946. The compound interest is ₹57,946, against ₹40,000 of simple interest.
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is earned only on the original amount. Compound interest is earned on the original amount plus the interest already added, so it grows faster over time.
Does more frequent compounding make a big difference?
A little. Monthly compounding earns slightly more than yearly at the same rate, but time and the rate itself matter far more than the frequency.
Can I use this for loans?
It shows how a balance grows when nothing is paid back. For a loan repaid in monthly instalments, use the EMI calculator.