📊 Compound Interest Calculator
A = P × (1 + r/n)nt
Frequently Asked Questions
How do I use the Compound Interest Calculator?
Enter the Principal Amount, Annual Interest Rate, and Time Period in years (using the preset buttons or your own values), then choose a Compounding Frequency (annually, semi-annually, quarterly, monthly or daily). Click "Calculate" to see the total amount, interest earned, effective rate, money milestones, and a year-by-year growth breakdown with chart.
What is the formula for compound interest?
A = P × (1 + r/n)nt, where A is the final amount, P is the principal, r is the annual interest rate (as a decimal), n is the number of times interest compounds per year, and t is the time in years. Compound Interest = A − P.
How does compounding frequency affect returns?
The more often interest is compounded (daily vs monthly vs annually), the higher the final amount, because interest is added to the principal more frequently and starts earning interest sooner. The "Effective Rate" shown reflects this — it's always slightly higher than the nominal annual rate when compounding more than once a year.
What is the difference between compound interest and simple interest?
Simple interest is calculated only on the original principal, so it grows linearly. Compound interest is calculated on the principal plus all previously accumulated interest, so it grows exponentially — the difference becomes significant over longer periods. Compare with our Simple Interest Calculator.
How long does it take to double my money with compound interest?
The exact time to reach any multiple of your principal is t = log(multiple) / (n × log(1 + r/n)), solved from the compound interest formula. The Money Milestones section calculates this automatically for 2×, 3×, 5×, and 10× at your chosen rate and compounding frequency.
What is the year-by-year breakdown table?
It shows, for each year, the opening balance, interest earned that year, closing balance, and cumulative growth percentage — letting you see exactly how the compounding effect accelerates your returns over time.
When I select "Daily" compounding, how many days per year does the calculator use?
This calculator uses n = 365 for daily compounding, the standard convention used by most Indian banks regardless of leap years. Some financial institutions globally use a 360-day convention, which produces a marginally different result for the same nominal rate — the difference is usually negligible for typical principal amounts and tenures.
Does this calculator account for inflation?
No, all figures shown are nominal (face-value) amounts based purely on the interest rate you enter. To estimate the real (inflation-adjusted) growth of your money, you can run this calculator with a "real rate" obtained by approximately subtracting the expected inflation rate from your nominal interest rate (e.g. 8% interest minus 5% inflation ≈ 3% real rate).