Compound Interest Calculator — Growth Over Time

This free compound interest calculator shows how an investment or deposit grows when interest is earned on both principal and previously accumulated interest. It uses the standard formula A = P(1 + r/n)^(nt), where n is the number of compounding periods per year, so you can compare yearly, quarterly, monthly, and daily compounding. A handy cross-check is the Rule of 72: divide 72 by your annual return to estimate the years to double your money. All maths runs locally in your browser — nothing is uploaded.

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Interest earned
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How does compound interest work?

Compound interest earns returns on both the original principal and the accumulated interest from previous periods. The formula is A = P × (1 + r/n)nt, where P is the principal, r is the annual interest rate (decimal), n is compounding frequency per year, and t is time in years. The final interest earned is A − P.

The compounding frequency makes a measurable difference: $10,000 at 8% for 10 years yields $21,589 compounded annually, $21,911 monthly, and $21,980 daily. More frequent compounding always produces more. A useful mental shortcut is the Rule of 72: divide 72 by the annual interest rate to estimate years to double your money — at 8%, money doubles in ~9 years; at 12%, in ~6 years. Compound interest is the core engine behind savings accounts, fixed deposits, mutual funds, and debt. Understanding it helps you choose higher-frequency compounding options and start investing as early as possible, since time is the most powerful variable.

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Simple interest grows in a straight line; compound interest curves upward as returns earn returns. The gap widens dramatically over time.

Simple vs compound interest

Simple interest is paid only on the original principal; compound interest is paid on principal plus previously earned interest. The compound formula is A = P(1 + r/n)^(nt), where n is the number of compounding periods per year and t the years. The more frequently interest compounds — yearly, quarterly, monthly, daily — the larger the final amount, though the gap between monthly and daily compounding is small at normal rates.

The Rule of 72

To estimate how long money takes to double, divide 72 by the annual return: at 8% it doubles in about 9 years, at 12% in about 6. It is an approximation that works well for rates between 6% and 15% and is a fast sanity check on any growth claim.

Worked example

₹1,00,000 at 10% for 10 years grows to ₹2,59,374 with annual compounding, but to ₹2,70,704 with monthly compounding — an extra ₹11,330 purely from compounding frequency. Over 30 years the same principal becomes more than ₹17 lakh, illustrating why time horizon dominates final outcomes.

⚠️ Common Mistakes to Avoid

Frequently asked questions

What is compound interest?

Compound interest is interest calculated on the initial principal and also on the accumulated interest of previous periods.

Does compounding frequency matter?

Yes, the more frequently interest is compounded (e.g., monthly vs. annually), the faster your investment grows.

Reviewed by the ToolsmithPro editorial team · Last updated June 2026. Every calculation and conversion runs entirely in your browser — your inputs are never uploaded, stored or shared. Formulas and methodology are documented on our about page; spot an error? tell us and we'll fix it.