Compound Interest Calculator
Interest earned on interest, not just on the original amount — the reason a lump sum grows faster the longer it’s left untouched.
Compound interest calculator
How much a lump sum grows when interest is earned on interest, not just on the original amount — plus the full year-by-year growth, not just the final figure.
| Year | Opening | Interest earned | Closing |
|---|---|---|---|
| 1 | ₹1,00,000 | ₹8,000 | ₹1,08,000 |
| 2 | ₹1,08,000 | ₹8,640 | ₹1,16,640 |
| 3 | ₹1,16,640 | ₹9,331 | ₹1,25,971 |
| 4 | ₹1,25,971 | ₹10,078 | ₹1,36,049 |
| 5 | ₹1,36,049 | ₹10,884 | ₹1,46,933 |
| 6 | ₹1,46,933 | ₹11,755 | ₹1,58,687 |
| 7 | ₹1,58,687 | ₹12,695 | ₹1,71,382 |
| 8 | ₹1,71,382 | ₹13,711 | ₹1,85,093 |
| 9 | ₹1,85,093 | ₹14,807 | ₹1,99,900 |
| 10 | ₹1,99,900 | ₹15,992 | ₹2,15,892 |
Educational illustration only. Assumes a fixed interest rate for the entire period — real investments often have rates that vary over time. Notice how each year's interest is larger than the last, since it's earned on a growing balance.
The formula
A = P × (1 + r/n)^(n × t)Where P is the principal, r is the annual interest rate (as a decimal), n is the number of times interest compounds per year, and t is the number of years. More frequent compounding (monthly vs annually) produces a slightly higher return at the same stated annual rate, because interest starts earning its own interest sooner.
Why time matters more than rate
Because growth compounds, doubling the number of years has a much larger effect on the final amount than a proportionally similar increase in the interest rate — which is the entire logic behind starting to save or invest early rather than waiting for a higher rate.