What is compound interest?

Compound interest is interest earned on both the original amount and the interest that has already been added to it. Over long periods this creates exponential growth.

Why should I start investing early?

Compound interest grows with time, so early contributions have many more periods to compound. Starting 10 years earlier can more than double your final amount at the same rate.

Compound Interest Calculator

Include a lump sum and monthly savings to see the full picture.

Investment Details

Initial Amount ($)

Monthly Contribution ($)

Annual Interest Rate (%)

Time Period (years)

yrs

Compounding

Maturity Amount

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Total Invested

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Interest Earned

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Effective Annual Rate

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Invested vs Value by Year

The compound interest formula

Maturity = Initial × (1 + r)^n + Monthly × (((1 + r)^n − 1) / r), where r is the monthly rate and n the number of months. The interest column shows how much of the final amount is pure earnings — the reward for letting your money compound.

Compound Interest FAQ

How often should I contribute?▶

Regular monthly contributions (a SIP-like habit) compound beautifully because each deposit earns interest for the rest of the period. The earlier and more regularly you invest, the better.

What rate should I use?▶

Use a conservative rate for planning: fixed deposits around 5–7%, good equity funds 10–14%. Remember that actual returns are not guaranteed.