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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CalcMate
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
Ready to calculate
Your investment growth will appear here
Enter an amount, return rate, time, and compounding frequency.
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.
Practical guidance
Use the Compound Interest with confidence
Project a lump sum and monthly additions with yearly, quarterly, monthly or daily compounding. Compare maturity, interest and effective annual yield.
Worked example
With ₹1,00,000 principal, ₹0 monthly addition, 8% annual interest and 5 years, yearly compounding produces ₹1,46,933 maturity. Monthly compounding produces ₹1,48,985. Both summary values round to whole rupees.
Assumptions and limits
Duration rounds to whole months, with at least one modeled month. Daily compounding means 365 periods per year, not actual dated accrual. Rates are fixed assumptions; tax, fees, inflation and losses are excluded.
How to read the result
Contributions are added at month end, after growth. Interest is maturity minus principal and all contributions. The effective annual yield includes compounding and can exceed the entered nominal percentage.
Inputs and units
Enter opening principal and monthly contribution in rupees, annual nominal interest percentage, years and compounding frequency. Use a zero monthly contribution to model only a lump sum.
Formula and variables
Monthly growth g = (1 + annual rate / frequency)^(frequency / 12) − 1, with the annual rate as a decimal. Each month: balance = balance × (1 + g) + monthly contribution.
Comparisons and common mistakes
Use FD for a deposit with no additional contributions and SIP for beginning-of-month payments with annual step-up. Simple Interest excludes interest on prior interest.
Why does frequency matter even with the same annual rate?
The input is nominal annual interest. More compounding periods change the effective annual yield. Comparing products requires checking whether the quoted rate is nominal or already an effective yield.
Guide checked
Read our calculation methodology Guide checked against the web calculator by an automated coding assistant. Independent professional review is not recorded.
Substantive guide update: .