Compound Interest Calculator
Interest earning interest. Calculate compound interest at any frequency, and see how much compounding adds over simple interest.
About the Compound Interest Calculator
Compound interest pays interest on your accumulated interest as well as on the original principal. The effect is small in year one and dominant by year twenty, which is why compounding frequency and time matter more than small differences in the headline rate. This calculator also shows what you would have earned under simple interest, so the compounding premium is explicit.
Compound interest formula
A = P x (1 + r/n)^(n x t) and CI = A - P
- A
- Final amount
- P
- Principal
- r
- Annual rate (as a decimal)
- n
- Compounding periods per year
- t
- Time in years
Raising n increases the result, but with diminishing effect - the step from yearly to quarterly matters far more than quarterly to daily.
Using this calculator
- Enter the principal amount.
- Set the annual interest rate and time period.
- Choose how often interest compounds.
- Compare the compound total against the simple-interest figure.
Compound Interest Calculator FAQs
What is the compound interest formula?
A = P(1 + r/n)^(nt), where P is principal, r is the annual rate as a decimal, n is compounding periods per year and t is years. Compound interest itself is A minus P, the amount above your original principal.
How is compound interest different from simple interest?
Simple interest is calculated only on the original principal, so it grows in a straight line. Compound interest is calculated on principal plus accumulated interest, so it grows exponentially and the gap widens sharply over long periods.
Does compounding frequency make a big difference?
Less than most people expect. Moving from annual to quarterly compounding produces a meaningful gain, but quarterly to daily adds very little. Rate and time period influence the outcome far more than frequency.
What is the rule of 72?
Dividing 72 by the annual return gives a rough number of years for money to double. At 8% that is about nine years. It is a mental shortcut that stays reasonably accurate for rates between roughly 6% and 12%.
Where does compound interest apply in practice?
Fixed and recurring deposits, PPF, EPF, bonds that reinvest coupons, and reinvested mutual fund growth all compound. It also works against you on credit card balances and loans, where unpaid interest is added to the outstanding amount.
Related calculators
-
Simple Interest Calculator
Calculate simple interest and the total repayable amount for any principal, rate and period.
Open calculator -
FD Calculator
Calculate the maturity amount and interest earned on a fixed deposit at any rate and tenure.
Open calculator -
PPF Calculator
Project your PPF balance across the 15-year term, with year-by-year interest and closing balance.
Open calculator -
CAGR Calculator
Convert a start value, an end value and a time period into a smoothed annual growth rate.
Open calculator -
Lumpsum Calculator
Project the future value of a single one-time mutual fund investment over any holding period.
Open calculator -
RD Calculator
Work out what a fixed monthly recurring deposit will be worth at maturity, with quarterly compounding.
Open calculator
Important: this calculator provides general information and arithmetic only. It is not personal financial, tax or investment advice. Projected returns are illustrations based on the rate you enter, not guarantees, and market-linked investments can fall in value. Verify current tax rates and scheme terms before acting, and consult a qualified adviser where the decision matters.