Compound Interest Calculator
Calculate compound interest and maturity value for any compounding frequency — yearly, half-yearly, quarterly, monthly or daily — and see how much you gain over simple interest.
Inputs
Report details (optional — appears on the PDF report)
Results
Formula
- P = principal · r = annual rate as a decimal (R/100)
- n = compounding periods per year · t = time in years
- A = maturity amount · CI = compound interest earned
How It Works
With compound interest, each period's interest is added to the balance, so the next period earns interest on a larger amount. The more often interest compounds, the faster the balance grows.
The effective annual rate (EAR) shown converts the nominal rate and compounding frequency into the single yearly rate that would produce the same growth — useful for comparing offers.
Worked Example
Given: P = ₹100,000, R = 8% p.a., t = 5 years, compounded quarterly (n = 4)
r/n = 0.08/4 = 0.02 · n×t = 20
A = 100,000 × (1.02)20 = 100,000 × 1.48595 ≈ ₹148,595
CI = 148,595 − 100,000 = ₹48,595 (vs ₹40,000 simple interest → gain ₹8,595)
Engineering Notes
- Higher compounding frequency raises the effective yield; the gain from monthly to daily compounding is small.
- Assumes a constant rate with no additional deposits or withdrawals during the period.
- Bank fixed deposits in India typically compound quarterly; savings accounts often quarterly too.
- Taxes on interest income (e.g. TDS) and inflation are not accounted for.
FAQ
Which frequency should I choose?
Use what your bank or scheme states — quarterly is the most common for deposits.
What is the effective annual rate?
The single yearly rate equivalent to your nominal rate plus compounding — the fairest way to compare two offers.
Does this handle monthly deposits?
No — this is for a one-time principal. Recurring contributions need an SIP/RD calculator.
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