Compound Interest Calculator
Work out what a lump sum grows to with compound interest, and see how much more it earns than simple interest.
Researched by Mirza Seraj BaigFacts last checked against official sources on 7 September 2026How often interest is added to the principal. More frequent compounding gives a slightly higher return.
Maturity amount
₹2,20,804
≈ 2.21 lakh
- Principal
- ₹1,00,000
- Compound interest
- ₹1,20,804
- Simple interest would be
- ₹80,000
- Gain from compounding
- ₹40,804
How this is calculated
A = P × (1 + r ÷ n)^(n × t), where P is the principal, r the annual interest rate as a decimal, n the number of times interest is compounded per year, and t the number of years. The compound interest earned is A − P.
Frequently asked questions
What is the compound interest formula?
A = P × (1 + r ÷ n)^(n × t). P is the principal, r the annual rate as a decimal, n how many times a year interest is compounded, and t the time in years. Subtract the principal from A to get the interest earned.
How is compound interest different from simple interest?
Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus the interest already added, so the balance grows faster over time. This calculator shows both so you can see the difference.
Does compounding frequency matter?
Yes, though less than most people expect. For the same annual rate, quarterly compounding beats yearly, and monthly beats quarterly — but the gap narrows quickly. The rate and the time period matter far more than the frequency.
Which Indian schemes use compound interest?
PPF and Sukanya Samriddhi compound annually, post office recurring deposits compound quarterly, and most bank fixed deposits compound quarterly. Each has its own dedicated calculator on this site.
More calculators
PPF Calculator
Project the maturity value of a Public Provident Fund account from your yearly deposit, the notified interest rate and the number of years you stay invested.
RD Calculator
Estimate the maturity value of a recurring deposit at the post office or a bank, from your monthly deposit and the interest rate.