Compound Interest Calculator
See how your investment grows when interest is compounded annually over time.
How does this compound interest calculator work?
Enter the principal amount, annual interest rate, and time period to see how your investment grows with compound interest.
Formula
A = P (1 + r)n Where:
- A = Total value (principal + interest)
- P = Principal amount
- r = Annual interest rate (decimal)
- n = Number of years
Interest is compounded annually, meaning each year the interest earned itself earns interest in the next year.
Why it matters
- See how interest builds on interest over long periods
- Compare rates and tenures side by side
- Check why starting earlier leaves more time to compound
- Rough future value for FDs or similar fixed-rate products
Note: Assumes a fixed annual rate. Bank FD terms and tax may differ. Not financial advice.
Compound Interest Calculator: guide and FAQ
What is it?
With compound interest you earn on the principal and on interest already added. FDs, PPF-style products, and reinvested fund growth work this way when you model them at a fixed rate.
How to use this calculator
- Enter principal Enter the amount you deposit or invest upfront.
- Set annual interest rate Enter the yearly rate. For bank FDs, check whether interest is compounded quarterly.
- Choose years Enter how long the money stays invested.
- Review interest vs total See how much of the final amount is principal and how much is interest.
Worked example
₹1 lakh at 8% for 10 years is about ₹2.16 lakh in this annual compounding model.
Practical tips
- Longer tenure usually means more interest in the total.
- Use the inflation calculator if you want to compare maturity with today's prices.
Frequently asked questions
Compound vs simple interest?
Simple interest is only on the principal. Compound interest adds prior interest to the base, so the total is higher for the same rate and time.
How often do banks compound FD interest?
Many Indian FDs compound quarterly. This tool uses annual compounding as a simple estimate. Read your FD receipt for the exact method.