Compound Interest Calculator
Include a lump sum and monthly savings to see the full picture.
Investment Details
Maturity Amount
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
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Compound Interest Calculator — see the eighth wonder of the world
Compound interest is interest earned on your interest. Over long periods it creates exponential growth that simple interest cannot match. This calculator combines a lump sum and monthly contributions with a compounding frequency of your choice — monthly, quarterly, semi-annually, annually or continuous — to show your exact maturity value, interest earned and effective annual rate.
The compound interest formula
Maturity = P × (1 + r/m)^(m×t) + C × [((1 + r/m)^(m×t) − 1) ÷ (r/m)], where P is the initial amount, C the monthly contribution, r the annual rate, m the compounding frequency and t the term in years.
A $1,00,000 lump sum plus $2,000/month at 7% for 10 years becomes roughly $5,50,000 — nearly double the $3,40,000 invested, thanks to compounding.
Continuous compounding (e^rt) is the theoretical maximum and is used by some modern digital savings products.
Why starting early beats investing more
Investor A invests $5,000/month from age 25 to 35 ($60,000 total). Investor B invests $5,000/month from 35 to 60 ($150,000 total). At 10% p.a., A's money grows to about $1.4 million vs B's $600,000 — A ends with more despite investing 2.5× less!
The first decade of contributions does roughly 60% of the work over a 40-year horizon because every dollar compounds for decades.
This is why financial advisors repeat: start yesterday.
Simple vs compound interest
Simple interest is calculated only on the original principal: $1,00,000 at 10% for 20 years grows to $3,00,000.
Compound interest at the same rate and term grows to $6,72,750 — more than double.
For long-term goals (retirement, education), always use compound-interest products. For short-term debt, avoid compound-interest charges on credit cards.
How to use this calculator
- Enter the initial (lump sum) amount.
- Add a monthly contribution if you plan to save regularly.
- Set the annual interest rate.
- Choose the number of years.
- Pick the compounding frequency and read your results instantly.
Pro tips
- Use the Rule of 72: divide 72 by your rate to approximate doubling time (72 ÷ 9 = 8 years).
- Higher compounding frequency earns slightly more — prefer daily/monthly products over annual.
- Never pay compound interest on credit cards; always pay the full statement balance.
Advantages & considerations
✅ Advantages
- Exponential growth for long horizons
- Encourages regular investing discipline
- Accurate for FD, mutual fund and PPF growth
⚠️ Considerations
- Returns on equity are not guaranteed
- Inflation erodes growth — use real return for planning