Compound Interest Calculator
Explore compound growth, contributions and the effect of time on your savings.
Open for tax, inflation and account-specific timing assumptions.
Compound growth and simple interest
Before tax and inflation. Uses the selected compounding frequency and contribution timing.
View chart data
Separate your contributions from the growth they generate
Compound interest earns interest on previously accumulated interest. This tool combines an initial amount with regular additions and makes the nominal rate, compounding frequency and effective annual yield explicit. It models a constant non-negative rate, not stock-market volatility or guaranteed investment performance.
Worked example
At a nominal annual rate of 12%, monthly compounding produces an effective annual yield of approximately 12.6825%. An initial Rs 1,00,000 with no additions becomes approximately Rs 1,12,682.50 in one year before tax.
Formula and calculation assumptions
Monthly rate = (1 + nominal annual rate / frequency)^(frequency / 12) - 1Rates in the formula are decimals. Every month, the balance grows at this equivalent rate. Recurring contributions are added before growth in beginning-of-month mode and after growth in end-of-month mode. No intermediate rounding is applied. Final displays are rounded to rupees; the monthly CSV retains two decimal places. Tenure is an integer number of months.
Estimated tax equals accumulated interest multiplied by your assumed tax percentage. It is deducted only from the final displayed balance, not from annual accrual. Today's purchasing power divides that net balance by (1 + inflation)^(months / 12). Neither tax input nor inflation default is a statutory rate or a forecast.
Compound Interest Calculator: Frequently Asked Questions
Is daily compounding the same as continuous compounding?
No. Daily compounding uses a finite number of periods, modeled here as 365 per year. Continuous compounding uses the limit P x e^(r x t) without additions. This tool offers discrete frequencies, not a continuous-compounding mode.
What is compound interest?
Compound interest earns interest on both the original principal and previously accumulated interest. With a positive rate and reinvestment, the amount of interest earned in later periods increases as the balance grows.
What is the compound interest formula?
Without additional deposits, future value is P x (1 + r/m)^(m x t). P is principal, r is the nominal annual rate as a decimal, m is compounding frequency and t is years. Interest earned is future value minus principal.
How is compound interest different from simple interest?
Simple interest applies the rate only to the original principal. Compound interest also grows previously earned interest. At a positive rate over multiple compounding periods, reinvestment produces a higher ending amount.
How do monthly contributions change compound growth?
Each addition has its own remaining investment period. It is therefore incorrect to add all future deposits to the initial principal and compound them for the whole tenure. The calculator applies contributions month by month.
More questions (6)
Does more frequent compounding always improve returns?
For the same positive nominal annual rate and otherwise identical terms, more frequent compounding increases the effective annual yield. Two products quoted using different rate conventions cannot be compared by frequency alone.
Can I calculate compounding over 100 or 200 years?
The tool supports illustrations up to 200 years. Such long projections are mathematical scenarios, not credible forecasts of investment rates, taxes, currencies or purchasing power across generations.
Does the Rule of 72 give an exact doubling time?
No. Dividing 72 by the annual percentage rate is a shortcut for a limited range of positive rates. Exact doubling time depends on the growth factor and compounding convention; it differs from the shortcut.
What is the difference between nominal and effective rates?
The entered nominal annual rate is divided by compounding periods per year. Effective annual yield includes interest on interest across those periods. Annual compounding makes the two equal.
How are monthly additions handled with annual compounding?
The model converts the selected compounding convention to an equivalent monthly rate. This assumes fractional-period accrual; an account that credits interest only on specific dates can differ.
Does daily compounding use calendar dates?
No. Daily means 365 compounding periods per year in this model. Tenure uses months divided by 12 and does not apply leap-year or actual-day adjustments.