Compound Interest Calculator
See how interest compounds over time. Choose your compounding frequency — monthly compounding earns more than annual compounding at the same rate.
- Principal
- $100,000
- Interest earned
- $64,531
- Final value
- $164,531
What is compound interest?
Compound interest is interest calculated on both the initial principal and the interest that has already been earned. In contrast to simple interest — which only earns on the original amount — compound interest earns on a growing base, so the curve gets steeper over time.
This is the mechanism behind most long-term investment returns, savings accounts and fixed deposits. The more frequently the interest is compounded (monthly vs. annually), the more you earn at the same nominal rate.
The compound interest formula
Total interest earned = FV − P.
How compounding frequency affects returns
At the same 10% annual rate, here is what ₹1,00,000 becomes after 10 years depending on how often interest is compounded:
| Frequency | Final value | Interest earned |
|---|---|---|
| Annually | ₹2,59,374 | ₹1,59,374 |
| Semi-annually | ₹2,65,330 | ₹1,65,330 |
| Quarterly | ₹2,68,506 | ₹1,68,506 |
| Monthly | ₹2,70,704 | ₹1,70,704 |
Monthly compounding earns about ₹11,000 more than annual compounding on the same principal over 10 years.
Compound vs simple interest
With simple interest, a ₹1,00,000 principal at 10% earns exactly ₹10,000 per year regardless of how long it has been invested — so after 10 years the total interest is ₹1,00,000 and the final value is ₹2,00,000.
With monthly compound interest at the same rate, the final value is ₹2,70,704 — ₹70,704 more. That difference is entirely due to “interest on interest” and grows larger the longer the investment period.
For growing investments through regular contributions, see the SIP Calculator. To measure the actual growth rate of a past investment, use the CAGR Calculator.