Compound Interest Calculator 2026 - CI Calculator with Formula

Calculate compound interest with our free CI calculator using accurate formulas. Understand how your investments grow exponentially with compound interest over time. This calculator supports multiple compounding frequencies including annual, quarterly, monthly, and daily compounding. Perfect for calculating returns on fixed deposits, recurring deposits, PPF, mutual funds, and other investment instruments. See the power of compounding - how interest on interest makes your money grow faster than simple interest. Essential tool for long-term investment planning, retirement corpus building, and understanding time value of money. Compare different compounding frequencies to maximize your returns. Includes detailed breakdown of principal, interest earned, and total maturity amount with step-by-step calculation methodology.

Advertisement Space

banner - top

Calculate Compound Interest

%
years

More frequent compounding = higher returns

Advertisement Space

large - mid-content

Compound Interest Formula Explained

Complete CI Formula

A = P(1 + r/n)^(nt)

Compound Interest = A - P

Where:

• A = Final amount (maturity value)

• P = Principal amount (initial investment)

• r = Annual interest rate (in decimal, e.g., 8% = 0.08)

• n = Number of times interest is compounded per year

• t = Time period in years

Step-by-Step Calculation Example

Investment: ₹1,00,000 at 10% for 5 years (Quarterly Compounding)

Given:
P = ₹1,00,000.00
r = 10% = 0.10
n = 4 (quarterly)
t = 5 years

Calculation:
A = 1,00,000 × (1 + 0.10/4)^(4×5)
A = 1,00,000 × (1 + 0.025)^20
A = 1,00,000 × (1.025)^20
A = 1,00,000 × 1.6386
A = ₹1,63,862.00

Compound Interest = ₹1,63,862.00 - ₹1,00,000.00 = ₹63,862.00
Note: Simple interest for same investment = ₹50,000.00 (₹13,862.00 less!)

Compounding Frequency Comparison

FrequencyTimes/Year (n)₹1L @ 10% for 10yrsDifference
Annually1₹2,59,374.00Base
Half-Yearly2₹2,65,330.00+₹5,956.00
Quarterly4₹2,68,506.00+₹9,132.00
Monthly12₹2,70,704.00+₹11,330.00
Daily365₹2,71,791.00+₹12,417.00

*More frequent compounding always yields higher returns

Power of Compounding Over Time

Years₹1L @ 8%₹1L @ 10%₹1L @ 12%₹1L @ 15%
5 years₹1,46,933.00₹1,61,051.00₹1,76,234.00₹2,01,136.00
10 years₹2,15,892.00₹2,59,374.00₹3,10,585.00₹4,04,556.00
15 years₹3,17,217.00₹4,17,725.00₹5,47,357.00₹8,13,706.00
20 years₹4,66,096.00₹6,72,750.00₹9,64,629.00₹16,36,654.00
25 years₹6,84,848.00₹10,83,471.00₹17,00,006.00₹32,91,895.00
30 years₹10,06,266.00₹17,44,940.00₹29,95,992.00₹66,21,177.00

*Annual compounding. Notice how returns accelerate with higher rates and longer time periods.

Compound Interest vs Simple Interest

Compound Interest

  • • Interest calculated on principal + accumulated interest
  • • Exponential growth over time
  • • Formula: A = P(1 + r/n)^(nt)
  • • Better for long-term investments
  • • Common in: FD, PPF, mutual funds
  • • Example: ₹1L at 10% for 10 years = ₹2,59,374.00

Simple Interest

  • • Interest calculated only on principal
  • • Linear growth over time
  • • Formula: SI = P × r × t
  • • Better for short-term loans
  • • Common in: Short-term loans, some bonds
  • • Example: ₹1L at 10% for 10 years = ₹2,00,000.00 only

Rule of 72: Quick Doubling Time Estimation

The Rule of 72 is a simple way to estimate how long it takes to double your money. Divide 72 by the annual interest rate to get approximate years.

Interest RateYears to Double (Rule of 72)Actual Years
6%72 ÷ 6 = 12 years11.9 years
8%72 ÷ 8 = 9 years9.0 years
10%72 ÷ 10 = 7.2 years7.3 years
12%72 ÷ 12 = 6 years6.1 years
15%72 ÷ 15 = 4.8 years4.96 years

Practical Tips for Maximizing Compound Interest

  1. Start Early: Time is the most powerful factor in compounding. Starting 5 years earlier can double your final corpus.
  2. Invest Regularly: Consistent monthly investments through SIP harness compounding better than lump sum.
  3. Choose Higher Frequency: Opt for monthly or quarterly compounding over annual when possible.
  4. Reinvest Returns: Don't withdraw interest. Let it compound for exponential growth.
  5. Longer Tenure: Compound interest effect multiplies significantly after 15+ years.
  6. Higher Rates: Even 2-3% higher return makes massive difference over 20-30 years.
  7. Tax-Efficient Instruments: Use PPF, ELSS, NPS for compounding with tax benefits.

Frequently Asked Questions

Advertisement Space

large - bottom