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Compound Interest Calculator
Calculate the power of compound interest on your investments
₹
% p.a.
Years
Compounding Frequency
Maturity Amount
₹16,453
Total Interest: ₹6,453
Investment Breakup
Principal: 60.8% Interest: 39.2%
Understanding Compound Interest
Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest. It is the result of reinvesting interest, rather than paying it out, so that interest in the next period is then earned on the principal sum plus previously accumulated interest.
Key Concepts:
- Principal: The initial investment amount
- Interest Rate: Annual rate of return
- Time Period: Duration of investment
- Compounding Frequency: How often interest is calculated
- Power of Compounding: Interest earned on previously earned interest
Compounding Frequencies:
- Daily: Interest calculated every day
- Monthly: Interest calculated every month
- Quarterly: Interest calculated every 3 months
- Semi-Annually: Interest calculated every 6 months
- Annually: Interest calculated once a year
Example Calculation:
Investment of ₹1,00,000 at 10% interest for 5 years with monthly compounding:
- Principal Amount: ₹1,00,000
- Interest Earned: ₹64,700
- Maturity Amount: ₹1,64,700
Important Note:
The power of compound interest works best over longer time periods. Starting early with your investments can significantly increase your wealth due to the compounding effect.