Compound Interest Calculator
Most compound interest calculators hand you one number and stop. This one adds the three things that number leaves out: what your quoted rate is genuinely worth once the compounding frequency is applied, how long the money takes to double, and what the same inputs would do at every other frequency. That last table is the honest answer to whether daily compounding is worth chasing. It's an educational estimate, and it assumes a fixed rate held all the way through, which no real market return does.
Set to 0 for a single starting deposit only.
Final balance
₹30,08,507
- Total contributed
- ₹13,00,000
- Interest earned
- ₹17,08,507
- Effective annual rate
- 7.229%
- Time to double (starting balance)
- 9.93 years
Year by year
| Year | Opening | Paid in | Interest | Closing |
|---|---|---|---|---|
| 1 | ₹1,00,000 | ₹60,000 | ₹9,192 | ₹1,69,192 |
| 2 | ₹1,69,192 | ₹60,000 | ₹14,194 | ₹2,43,386 |
| 3 | ₹2,43,386 | ₹60,000 | ₹19,557 | ₹3,22,943 |
| 4 | ₹3,22,943 | ₹60,000 | ₹25,309 | ₹4,08,252 |
| 5 | ₹4,08,252 | ₹60,000 | ₹31,475 | ₹4,99,727 |
| 6 | ₹4,99,727 | ₹60,000 | ₹38,088 | ₹5,97,815 |
| 7 | ₹5,97,815 | ₹60,000 | ₹45,179 | ₹7,02,994 |
| 8 | ₹7,02,994 | ₹60,000 | ₹52,782 | ₹8,15,777 |
| 9 | ₹8,15,777 | ₹60,000 | ₹60,935 | ₹9,36,712 |
| 10 | ₹9,36,712 | ₹60,000 | ₹69,678 | ₹10,66,390 |
| 11 | ₹10,66,390 | ₹60,000 | ₹79,052 | ₹12,05,443 |
| 12 | ₹12,05,443 | ₹60,000 | ₹89,104 | ₹13,54,547 |
| 13 | ₹13,54,547 | ₹60,000 | ₹99,883 | ₹15,14,430 |
| 14 | ₹15,14,430 | ₹60,000 | ₹1,11,441 | ₹16,85,871 |
| 15 | ₹16,85,871 | ₹60,000 | ₹1,23,835 | ₹18,69,706 |
| 16 | ₹18,69,706 | ₹60,000 | ₹1,37,124 | ₹20,66,830 |
| 17 | ₹20,66,830 | ₹60,000 | ₹1,51,374 | ₹22,78,205 |
| 18 | ₹22,78,205 | ₹60,000 | ₹1,66,655 | ₹25,04,859 |
| 19 | ₹25,04,859 | ₹60,000 | ₹1,83,039 | ₹27,47,898 |
| 20 | ₹27,47,898 | ₹60,000 | ₹2,00,609 | ₹30,08,507 |
The same money at every compounding frequency
| Interest added | Final balance | Effective rate | Gained over yearly |
|---|---|---|---|
| Yearly | ₹29,91,602 | 7.000% | ... |
| Half-yearly | ₹30,00,559 | 7.122% | +₹8,958 |
| Quarterly | ₹30,05,272 | 7.186% | +₹13,671 |
| Monthly | ₹30,08,507 | 7.229% | +₹16,905 |
| Daily | ₹30,10,099 | 7.250% | +₹18,497 |
That last column is the one worth reading. Compounding more often does help, and it helps less than the search volume for daily compounding suggests. Moving from yearly to daily lifts the effective rate by about a third of a percentage point, while the rate itself moves in whole points. Daily also sits within a few rupees of continuous compounding, which is the mathematical ceiling, so once interest is added daily there is almost nothing left to win by adding it faster.
Cite this calculator
Using this in an article, a report or a class? Please credit it, and link back so readers can run the numbers themselves.
The Money Decoded. "Compound Interest Calculator." https://themoneydecoded.com/calculators/compound-interest
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How does the calculator work it out?
Compound interest is worked out on the original amount plus every rupee of interest already added, which the calculator applies with the standard formula and then adds your contributions on top. The principal side uses:
A = P × (1 + r/n)^(n × t)- A is the final balance.
- P is the principal, the starting balance.
- r is the annual interest rate, expressed as a decimal (7% becomes 0.07).
- n is the number of compounding periods per year (12 for monthly, 365 for daily, 1 for annually).
- t is the time in years.
When monthly contributions are added, the calculator uses the future-value-of-an-annuity formula on top of the principal growth:
FV_contributions = PMT × [((1 + i)^k - 1) / i]where PMT is the monthly contribution, i is the monthly rate (r ÷ 12), and k is the number of months (12 × t). The two pieces add together to give the final balance shown above.
A worked example
The calculator's own default figures show the two halves clearly: a starting amount that grows quietly, and contributions that end up doing most of the work. Take ₹1,00,000 at 7%, compounded monthly, for 20 years, with ₹5,000 paid in every month.
| Piece | Working | Result |
|---|---|---|
| Starting amount grows to | 1,00,000 x (1 + 0.07/12) to the power 240 | ₹4,03,874 |
| Contributions grow to | 5,000 x ((1 + 0.07/12) to the power 240, minus 1) / (0.07/12) | ₹26,04,633 |
| Final balance | the two added together | ₹30,08,507 |
| Total paid in | 1,00,000 + (5,000 x 240) | ₹13,00,000 |
| Interest earned | final balance minus total paid in | ₹17,08,507 |
Interest came to ₹17,08,507 against ₹13,00,000 paid in, so the compounding out-earned the contributions over that horizon. The effective annual rate on a 7% nominal rate compounded monthly is 7.229%, and at that rate the money doubles every 9.93 years.
Does compounding frequency matter?
Compounding more often does increase the result, and it increases it far less than the popularity of the phrase "daily compound interest" suggests. The frequency table under the calculator runs your own figures at every setting so you can see the size of the effect rather than guess at it.
On ₹1,00,000 at 8% held for ten years, the whole distance from yearly to daily is ₹6,642:
| Interest added | After 10 years | Effective annual rate |
|---|---|---|
| Yearly | ₹2,15,892 | 8.000% |
| Half-yearly | ₹2,19,112 | 8.160% |
| Quarterly | ₹2,20,804 | 8.243% |
| Monthly | ₹2,21,964 | 8.300% |
| Daily | ₹2,22,535 | 8.328% |
Daily compounding lands within about ₹19 of continuous compounding, the theoretical ceiling where interest is added at every instant, so once it is daily there is essentially nothing left to win. Where the effective rate does earn its keep is in comparing offers: 7.9% compounded monthly works out to 8.19%, which beats a flat 8% compounded yearly.
For reference, Indian bank fixed deposits generally compound quarterly, Public Provident Fund compounds once a year, and RBI requires savings account interest to be calculated on a daily product basis but credited only quarterly or later.
What this calculator does not do
It models growth at a fixed rate with optional level monthly contributions. It does not adjust for inflation, which quietly reduces every figure above in real terms, and it does not apply tax, which differs by product and country and can change an after-tax result substantially.
It also assumes the rate holds for the entire period, which no market return and no floating-rate product actually does, and it does not handle withdrawals, contributions that rise over time, or fees. The time-to-double figure applies to the starting amount at the effective rate, so it stops being meaningful once contributions are in play. Nothing here is a recommendation about where to put money, and anything touching your own tax position belongs with a chartered accountant.
Pair this with the guide
For why compounding curves instead of running straight, what the Rule of 72 is good for, and how the same mechanism works against you on a credit card, read What Is Compound Interest Explained Simply. The straight-line version is covered in what simple interest is, the two are set against each other in simple vs compound interest, and our simple interest calculator runs the other side.
Frequently asked questions
How does this compound interest calculator work?
It applies A = P x (1 + r/n) to the power n x t to your starting balance, then adds the future value of your monthly contributions on top, and reports the two together. Beyond the final balance it shows the effective annual rate your chosen compounding frequency actually produces, how long the money takes to double, a year-by-year table, and the same inputs run at every compounding frequency so you can see what that setting is worth.
Does compounding frequency really matter?
Less than most people expect. On ₹1,00,000 at 8% held for 10 years, yearly compounding gives ₹2,15,892 and daily gives ₹2,22,535, a gap of ₹6,642 across the whole decade. Daily compounding also lands within about ₹19 of continuous compounding, which is the mathematical ceiling, so there is almost nothing left to gain beyond daily. In effective-rate terms, moving from yearly to daily at 8% is worth roughly a third of a percentage point.
What is the effective annual rate the calculator shows?
The effective annual rate is what your quoted rate is genuinely worth once the compounding frequency is applied, calculated as (1 + r/n) to the power n, minus 1. A 7% rate compounded monthly has an effective annual rate of 7.229%. This is the number that lets you compare two offers honestly, because a 7.9% rate compounded monthly beats an 8% rate compounded yearly.
Should I include monthly contributions?
Include them if you will actually be paying in each month, because over long horizons the contributions usually account for more of the final balance than the starting amount does. On the calculator's default figures, a ₹1,00,000 start grows to ₹4,03,874 over 20 years while ₹5,000 a month grows to ₹26,04,633. Set the contribution to zero to model a lump sum on its own, which also makes the time-to-double figure meaningful.
What interest rate should I use?
It depends entirely on what you are modelling, and the calculator takes any rate you enter. For reference points in India, Public Provident Fund pays 7.1%, National Savings Certificate 7.7%, and bank fixed deposits generally sit between 6.5% and 7.5%. Indian credit cards commonly charge 3.5% a month, which is an effective 51.1% a year. Using a real product rate rather than a round number keeps the output honest.
Why is compound interest higher than simple interest?
Because compound interest is charged on the original amount plus all the interest already added, while simple interest only ever uses the original amount. They are exactly equal for the first period, since there is no accumulated interest yet for compounding to work on, and the gap opens from period two onward. On ₹1,00,000 at 8% for 10 years, simple interest earns ₹80,000 and compound interest earns ₹1,15,892.
Sources
- Reserve Bank of India, Master Direction on Interest Rate on Deposits (Co-operative Banks), sections 6 and 11 (savings interest calculated on a daily product basis, credited quarterly or later), rbi.org.in
- National Savings Institute, Ministry of Finance, small savings interest rates (PPF 7.1%, NSC 7.7%), nsiindia.gov.in
- U.S. Securities and Exchange Commission, Compound Interest Calculator, investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
- Consumer Financial Protection Bureau, What is credit card interest?, consumerfinance.gov/ask-cfpb/what-is-credit-card-interest-en-43