Compound Interest Calculator
See how compound interest grows your investments over time with flexible compounding frequencies.
Compound Interest Calculator
Compounding Frequency
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The Mathematics of Compound Interest
Albert Einstein famously referred to compound interest as the "eighth wonder of the world". Unlike simple interest which only earns returns on the initial deposit, compound interest reinvests earned interest back into the principal.
A = Final accumulated amount (Principal + Interest)
P = Initial Principal balance
r = Annual interest rate (in decimal, e.g., 8% = 0.08)
n = Compounding frequency per year (Daily=365, Monthly=12, Quarterly=4, Annually=1)
t = Number of years
Impact of Compounding Frequency on ₹1,00,000 at 10% for 10 Years
| Compounding Frequency | Times / Year (n) | Total Interest Earned | Final Maturity Amount |
|---|---|---|---|
| Annual | 1 | ₹1,59,374 | ₹2,59,374 |
| Semi-Annual | 2 | ₹1,65,330 | ₹2,65,330 |
| Quarterly | 4 | ₹1,68,506 | ₹2,68,506 |
| Monthly | 12 | ₹1,70,704 | ₹2,70,704 |
| Daily | 365 | ₹1,71,791 | ₹2,71,791 |
Frequently Asked Questions
How does inflation affect compound interest?
To measure your real purchasing power growth, subtract the inflation rate from your nominal return rate: Real Rate = Nominal Return - Inflation Rate.
Which accounts offer compound interest?
Fixed Deposits (quarterly compounding), Public Provident Fund (annual compounding), Mutual Funds (continuous compounding via NAV growth), and National Pension System.