What is the Compound Interest Calculator? A compound interest calculator shows how a balance grows when interest is added to it and then earns interest itself, for the compounding frequency you choose, with an optional monthly top-up.
How to use the Compound Interest Calculator
- Enter the starting amount and the yearly interest rate.
- Choose the time period and how often interest is compounded.
- Optionally add a monthly top-up and an inflation rate.
- Compare the maturity value, the effective yearly return and what compounding adds over simple interest.
Frequently asked questions
What is the compound interest formula?
A = P × (1 + r/n)^(n × t), where P is the principal, r the yearly rate as a fraction, n the compounding periods a year and t the years. Interest earned is A − P.
Does compounding more often earn more?
Yes, slightly. At 8% a year, ₹1 lakh grows to about ₹1,46,933 in 5 years with yearly compounding and ₹1,49,176 with daily compounding.
What is the effective annual rate?
It is the real yearly return after compounding. 8% compounded quarterly is an effective 8.24% a year.
How often do Indian banks compound FDs?
Most banks compound fixed deposit interest quarterly. Savings accounts usually credit interest quarterly or monthly, depending on the bank.
Results are estimates based on the inputs you enter, not guaranteed returns or financial advice.