Compound interest formula
Lump-sum growth
A = P(1 + r/n)ⁿᵗ
P
Principal
r
Annual rate
n
Frequency
t
Years
A is maturity value. Monthly contributions are recurring end-of-month deposits added to the lump-sum growth.
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Investment growth tool
Compound Interest Calculator
See how your money can grow through compounding, time, and optional monthly contributions.
Initial principal₹1,00,000
Monthly contribution₹0
Optional deposit added at the end of each month.
Expected annual rate8% p.a.
Investment period5 years
Growth result
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Growth guide
Understand compound growth
Learn the formula, the effect of time, and why compounding frequency matters.
The power of time
Start earlier, compound longer
01
Reinvest earnings
Compounding works when returns remain invested and begin earning returns too.
02
Contribute consistently
Regular contributions can become a large share of the final value.
03
Compare effective rates
Use effective annual rates when comparing compounding frequencies.
Rule of 72 estimate
At 8%, money may double in about 9.0 years.
Helpful answers
Frequently asked questions
What is compound interest?+
Compound interest is interest calculated on both the original principal and the interest already earned. This creates interest-on-interest growth over time.
How is compound interest calculated?+
For a lump-sum investment, the formula is A = P(1 + r/n)^(nt), where P is principal, r is annual rate, n is compounding frequency, and t is time in years.
Does compounding more frequently increase returns?+
At the same nominal rate, more frequent compounding generally produces a slightly higher effective return because interest begins earning interest sooner.
How are monthly contributions calculated?+
Monthly contributions are treated as deposits made at the end of each month. Each completed contribution earns growth for the remaining investment period.
What is the effective annual rate?+
The effective annual rate is the return after accounting for compounding frequency. It can be higher than the quoted nominal rate.
What is the Rule of 72?+
The Rule of 72 estimates doubling time: divide 72 by the annual return percentage. It is a quick approximation rather than an exact result.