Compound Interest Calculator
Most Used Calculator
Compound Interest Calculator — Grow Your Investments Smarter
Compound interest is often called the eighth wonder of the world because it allows your money to grow exponentially over time. The Compound Interest Calculator by CalcKaro helps you quickly estimate how much your investment will grow when interest is compounded periodically.
This tool is ideal for planning long-term investments, fixed deposits, mutual funds, and savings accounts.
Simply enter your principal, rate of interest, time period, and compounding frequency to get your maturity amount and interest earned.
How to Use the Compound Interest Calculator
Enter Principal Amount (₹) – The initial sum you invest or borrow.
Enter Annual Interest Rate (%) – The rate offered by your bank, lender, or fund.
Enter Time Period (Years or Months) – The duration for which your investment will grow.
Select Compounding Frequency – Monthly, quarterly, half-yearly, or yearly.
Click “Calculate” – Get your Maturity Amount, Interest Earned, and a growth chart.
Tip: Use this calculator to compare different compounding frequencies — even small differences can significantly affect your returns over time.
Compound Interest Formula
The calculator uses the standard compound interest formula:
Where:
A = Maturity amount (Final value)
P = Principal amount
r = Annual interest rate (in decimal)
n = Compounding frequency per year
t = Time period (in years)
Interest earned is:
Example Calculation
Example:
If you invest ₹1,00,000 at 8% annual interest compounded quarterly for 5 years:
Interest earned = ₹1,48,595 − ₹1,00,000 = ₹48,595
So, your ₹1,00,000 investment grows to ₹1,48,595 in 5 years.
Understanding Compound Interest
Compound interest is interest calculated on both the principal and the accumulated interest from previous periods. This makes your money grow faster compared to simple interest.
Key factors affecting compound interest:
Interest Rate: Higher rates yield higher returns.
Compounding Frequency: More frequent compounding (monthly vs yearly) yields more returns.
Investment Duration: Longer investments exponentially increase returns.
Benefits of Using a Compound Interest Calculator
- Accurate Planning: Know exactly what your investment will yield.
- Better Decision-Making: Compare banks, deposits, and schemes easily.
- Visual Growth: See how your investment grows year-by-year.
- Easy Calculations: No manual work needed for complex compounding.
- Goal Planning: Helps plan retirement, education, or wealth accumulation goals.
Frequently Asked Questions
Q1. What is compound interest?
Compound interest is the interest calculated on the initial principal and the accumulated interest over previous periods.
Q2. How is compound interest different from simple interest?
Simple interest is calculated only on the principal, while compound interest is calculated on both principal and accumulated interest.
Q3. How often should interest be compounded?
More frequent compounding (monthly or quarterly) increases returns, but check your bank’s policy.
Q4. Can I compound interest for loans?
Yes, loans can also have compound interest, which increases the repayment amount compared to simple interest.
Q5. Does inflation affect compound interest returns?
Yes, inflation reduces the real value of returns. Always consider inflation-adjusted returns for long-term planning.
Disclaimer
This Compound Interest Calculator provides estimated results for planning purposes. Actual amounts may vary depending on your bank’s compounding frequency, interest rate changes, and investment terms. Always consult your financial institution or advisor before making financial decisions.
Most Used Calculator