Compound Interest Calculator
Calculate how your investment grows with compound interest year by year. Instant, free.
| Year | Balance | Interest Earned |
|---|---|---|
| 1 | $10,722.9 | +$722.9 |
| 2 | $11,498.06 | +$1,498.06 |
| 3 | $12,329.26 | +$2,329.26 |
| 4 | $13,220.54 | +$3,220.54 |
| 5 | $14,176.25 | +$4,176.25 |
| 6 | $15,201.06 | +$5,201.06 |
| 7 | $16,299.94 | +$6,299.94 |
| 8 | $17,478.26 | +$7,478.26 |
| 9 | $18,741.77 | +$8,741.77 |
| 10 | $20,096.61 | +$10,096.61 |
How to Use
- Step 1: Enter the principal amount (initial investment).
- Step 2: Set the annual interest rate and compounding frequency.
- Step 3: Enter the number of years. Results update instantly.
About Compound Interest Calculator
Compound interest is often called the "eighth wonder of the world" because of its dramatic long-term effects on investment growth. Unlike simple interest (which only earns on the principal), compound interest earns on both the principal and accumulated interest — causing exponential growth over time.
The formula A = P(1 + r/n)^(nt) calculates the final amount A, where P is the principal, r is the annual rate as a decimal, n is the number of compounding periods per year, and t is the number of years. More frequent compounding increases the effective annual yield — daily compounding outperforms monthly, which outperforms annual.
The year-by-year breakdown table shows exactly how your balance grows each year, making it easy to visualize the power of long-term investing and the Rule of 72 in action.
You may also find our Percentage Calculator, Tip Calculator, and Discount Calculator helpful.
Frequently Asked Questions
What is compound interest?
Interest calculated on both the initial principal and accumulated interest, making money grow faster than simple interest.
What does "compounded monthly" mean?
Interest is calculated and added to the balance 12 times per year. More frequent compounding = more growth.
What is the formula?
A = P(1 + r/n)^(nt) where P=principal, r=annual rate, n=compounds per year, t=years.
How do I maximize compound interest?
Higher rate, more frequent compounding, longer time, and higher principal all increase returns. Time is the most powerful factor.
What is the Rule of 72?
Divide 72 by the interest rate to estimate years to double your money. At 7%, money doubles in about 72/7 ≈ 10.3 years.
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Guide
How to estimate compound interest and year-by-year growth
Compound interest means interest is earned on the original amount and on the interest already added. This calculator applies the standard formula A = P(1 + r/n)^(nt) to four inputs, Principal, Annual Rate (%), Compounding Frequency and Years, and shows the Final Amount, Total Interest and the Principal you started with. A scrolling table lists the balance and interest earned at the end of every year.
It is aimed at one-off lump sums: a fixed deposit, a savings goal, or a comparison between two compounding choices. It has no field for regular monthly contributions, tax or inflation, so it does not model a SIP. The results are an informational estimate, not financial advice, and real products may compound or credit interest differently.
Step by step
- Type the starting amount in Principal. The labels and results show a dollar sign, but the arithmetic is the same for rupees or any other currency.
- Enter the yearly rate in Annual Rate (%), as 7 for seven per cent and not 0.07.
- Pick Compounding Frequency from the list: Annually (1), Semi-annually (2), Quarterly (4), Monthly (12) or Daily (365).
- Enter the number of Years. The field suggests 1 to 50.
- Read the three summary boxes, then scroll the Year-by-Year Breakdown table to see Year, Balance and Interest Earned.
When this is useful
- Estimating what a lump sum in a fixed deposit could become over a few years.
- Comparing the same rate with monthly, quarterly and annual compounding.
- Showing a student how interest on interest grows faster than a straight line.
- Setting a rough target for an education or retirement fund from one deposit.
Worked example: ₹1,00,000 at 8% for 10 years, compounded differently
Enter 100000 as Principal, 8 as Annual Rate and 10 as Years, then change the frequency. Annually gives a Final Amount of 215,892.5, which is interest of 115,892.5. Quarterly gives 220,803.97, monthly gives 221,964.02 and daily gives 222,534.58. The gap between annual and daily compounding is about 6,642 on the same deposit over ten years, and most of it comes from moving off annual compounding.
Tips for better results
- Use the rate and compounding method written in your bank's or scheme's terms; they differ between products.
- Run the same inputs at two frequencies to see how little or how much compounding changes the result at your rate.
- Read the table for milestones, such as the year the balance first passes double the principal.
- The table lists at most 50 years, while the summary boxes use whatever Years value you type.
Common mistakes
- Entering the rate as a decimal. Typing 0.08 means 0.08% and shows almost no growth. Type 8.
- Assuming the headline rate is what you earn per year. At 8% compounded monthly, the effective annual yield is about 8.30%, so monthly and annual versions of 8% are different offers.
- Treating the output as guaranteed. Market-linked investments do not earn a fixed rate, and fixed products may deduct tax, so a flat rate over many years is only an assumption.
- Forgetting extra deposits. The tool compounds the single Principal only, so adding money every month will make the real figure higher than what is shown.
Your files and privacy
Everything is computed in your browser and the amounts you enter are not sent to a server or saved by this tool. The page does not store any inputs between visits.
Frequently asked questions
What formula is used?
Final Amount = Principal × (1 + rate ÷ frequency) ^ (frequency × years), with the rate written as a decimal. Total Interest is the Final Amount minus the Principal. Results are rounded to two decimals.
Can I use it for rupees?
Yes. The maths is currency-neutral, so enter amounts in rupees and read the dollar sign as ₹. The tool does not convert currency.
Is this the same as a SIP calculator?
No. A SIP involves regular contributions, and this tool compounds one lump sum only. It also does not account for market returns that vary from year to year.
How is compound interest different from simple interest?
Simple interest is calculated on the original amount only. For ₹5,00,000 at 7.1% for 15 years, simple interest adds 5,32,500, whereas annual compounding adds 8,98,981.81, giving a Final Amount of 13,98,981.81.
What is the Rule of 72?
It is a mental shortcut: divide 72 by the rate to estimate years to double. At 7.1% that gives about 10.1 years, and exact annual compounding doubles in about 10.1 years too. Use the table here for accuracy.
Does the calculator include tax or inflation?
No. The figures are before tax and in nominal terms, so purchasing power will be lower than the Final Amount suggests. Treat the result as an estimate to discuss with a qualified adviser.
Guide reviewed 2026-10-11 by the useToolify team.
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