What is compound interest?

Compound interest is interest calculated on the initial principal and also on the accumulated interest from previous periods. So your money grows faster over time compared to simple interest.

What is the difference between compound and simple interest?

Simple interest is only on the principal (I = P×r×t). Compound interest is on principal plus previously earned interest, so the amount grows at an increasing rate.

How does compounding frequency affect returns?

More frequent compounding (e.g. monthly vs yearly) gives slightly higher returns for the same annual rate, because interest is added more often and then earns more interest.

Compound Interest Calculator

Calculate compound interest on a lump sum. Enter principal, annual rate, tenure and how often interest is compounded (yearly, half-yearly, quarterly or monthly). Useful for FDs and long-term savings.

Calculate Compound Interest

Principal (₹)

Annual rate (%)

Tenure (years)

Compounding

Compound interest formula

A = P × (1 + r/n)^(n×t)

A = Final amount, P = Principal, r = Annual interest rate (as decimal), n = Number of times compounded per year, t = Time in years.

Example

₹1,00,000 at 7% for 10 years, compounded annually: A = 1,00,000 × (1.07)^10 ≈ ₹1,96,715. Interest ≈ ₹96,715.

FAQs

Key Terms

Maturity amount: Final value received at deposit end: principal plus accumulated interest.
Compounding: Interest earned on both principal and previously earned interest.
Annualized rate: Interest rate quoted for one year; converted internally for period-wise calculations.

Benefits of This Calculator

Quickly compare tenure and rate combinations before locking deposits.
Understand maturity, principal, and interest split through chart-style outputs.
Use formula and FAQ context to validate bank app numbers confidently.