Compound Interest Calculator
What an amount grows to, and the effective rate behind it.
The amount you start with.
The nominal rate, before compounding is taken into account.
How often interest is added to the balance.
Enter a principal to see what it grows to.
How it works
Compound interest earns interest on the interest already earned. The more often it's added to the balance, the faster that happens — which is why the same 12% rate is worth more compounded monthly than annually. The effective annual rate is what the nominal rate actually works out to once compounding is counted, and it's the figure worth comparing between offers.
A = P(1 + r/n)^(nt) · compounded continuously: A = Pe^(rt)Example
- ₹1,00,000 at 8% for 5 years, compounded annually → ₹1,46,933
- The same amount compounded monthly → ₹1,48,985
For calculation purposes only. Real accounts may apply fees, taxes or a different day-count convention — this tool doesn't model any of those and doesn't give financial advice.
About this calculator
Compound interest earns interest on the interest already earned, so the balance grows faster the more often interest is added. This calculator takes a principal, an annual rate and a term, and compounds it annually, half-yearly, quarterly, monthly, daily or continuously — showing the final amount, the interest earned and a year-by-year breakdown.
It also reports the effective annual rate, which is the number actually worth comparing between offers: 12% compounded monthly works out to 12.68% a year, and a nominal rate on its own hides that difference.
Frequently asked questions
What is the compound interest formula?
A = P(1 + r/n)^(nt), where P is the principal, r the annual rate as a decimal, n the number of compounding periods per year and t the term in years. Compounded continuously the formula is A = Pe^(rt). The interest earned is A − P.
What is the difference between simple and compound interest?
Simple interest is charged on the original principal for the whole term, so it grows in a straight line. Compound interest adds each period's interest to the balance, so later interest is calculated on a larger amount. Over short terms the gap is small; over ten or twenty years it is large.
What is the effective annual rate?
It is what a nominal rate actually works out to once compounding is counted. A nominal 12% compounded monthly gives an effective annual rate of 12.68%, because each month's interest starts earning interest of its own. Comparing effective rates is the only fair way to compare two offers with different compounding frequencies.
Does compounding more often always give more?
Yes, but with diminishing returns. Going from annual to monthly compounding makes a noticeable difference; going from daily to continuous barely moves the number. Continuous compounding is the mathematical ceiling — the most any given nominal rate can produce.