How to use the compound interest calculator
- Enter the starting amount.
- Enter the interest rate or expected return as a yearly rate.
- Enter the number of years.
- Choose how often interest is added: yearly, half-yearly, quarterly, monthly or daily.
- Optionally, enter an amount you add at the end of each month.
The result shows the final value, the interest earned, the money you put in, the effective yearly rate and what simple interest would have given. Two tables follow: the same rate at every compounding frequency, and the account year by year.
Compound interest formula
For ₹1,00,000 at 12% compounded yearly for 10 years, A = 1,00,000 × 1.12^10 = ₹3,10,585. The interest earned is A − P, or ₹2,10,585.
Each year's interest is larger than the last, because it is earned on a larger balance. In the example, year 1 adds ₹12,000 and year 10 adds ₹33,277.
| Year | Start | Interest | End |
|---|---|---|---|
| 1 | ₹1,00,000 | ₹12,000 | ₹1,12,000 |
| 2 | ₹1,12,000 | ₹13,440 | ₹1,25,440 |
| 5 | ₹1,57,352 | ₹18,882 | ₹1,76,234 |
| 10 | ₹2,77,308 | ₹33,277 | ₹3,10,585 |
How often interest compounds
The more often interest is added, the higher the effective yearly rate, because each addition starts earning sooner. The gain from more frequent compounding gets smaller with each step.
| Compounding | Effective yearly rate at 12% | ₹1,00,000 after 10 years |
|---|---|---|
| Yearly | 12.00% | ₹3,10,585 |
| Half-yearly | 12.36% | ₹3,20,714 |
| Quarterly | 12.55% | ₹3,26,204 |
| Monthly | 12.68% | ₹3,30,039 |
| Daily | 12.75% | ₹3,31,946 |
Bank fixed deposits in India usually compound quarterly. Stock and fund returns have no fixed compounding: the value changes every trading day, so a quoted yearly return is already the effective rate.
Daily compound interest calculator
Choose Daily to use it as a daily compound interest calculator. Daily compounding adds 1/365 of the yearly rate every day. At 36.5% a year, that is 0.1% a day, and ₹1,00,000 grows to ₹1,44,025 in a year, an effective rate of 44.03%. Simple interest at 36.5% would give ₹1,36,500.
Traders sometimes work out what a fixed daily return would compound to. ₹1,00,000 growing 1% every trading day for 252 trading days ends at about ₹12,27,400, more than twelve times the start. No trading strategy earns a steady 1% a day. Real daily returns vary and include losing days, and a fall needs a larger gain to recover, so a figure like this says more about the arithmetic than about trading.
Simple vs compound interest calculator
Simple interest is earned only on the starting amount. Compound interest is earned on the starting amount and on the interest already added. The calculator shows both, so it works as a simple vs compound interest calculator for any rate and period.
| Years | Simple interest at 12% | Compound interest at 12%, yearly |
|---|---|---|
| 1 | ₹1,12,000 | ₹1,12,000 |
| 5 | ₹1,60,000 | ₹1,76,234 |
| 10 | ₹2,20,000 | ₹3,10,585 |
| 20 | ₹3,40,000 | ₹9,64,629 |
| 30 | ₹4,60,000 | ₹29,95,992 |
The two are equal after one year of yearly compounding. After that the gap widens every year: by year 30, compounding gives more than six times what simple interest does.
Adding money every month
A monthly addition grows the balance from two sides: new money and the interest on it. Starting with ₹1,00,000 and adding ₹10,000 a month at 12% compounded monthly, the account reaches ₹26,30,426 after 10 years. You put in ₹13,00,000, and interest makes up ₹13,30,426, slightly more than half.
For a stock or ETF bought every month, the SIP calculator works on the same principle and also deducts brokerage, charges and capital gains tax.
Compounding for traders
- Monthly to yearly returns. A steady 1% a month compounds to 12.68% a year, and 2% a month to 26.82% a year, not 12% and 24%.
- Volatility lowers the compound rate. A year of +30% followed by a year of −10% averages 10% a year, but compounds at 8.17% a year. A gain of 20% followed by a loss of 20% leaves you 4% down.
- Losses need larger gains to recover. After a 20% fall, a 25% gain is needed to get back to the start, and after a 50% fall, 100%.
- Costs compound too. Charges taken from every trade lower the rate the whole account compounds at. The stock profit calculator shows what charges and tax take from a single trade.
Rule of 72
At 12% a year, 72 ÷ 12 gives 6 years. The calculator works out the exact figure from the effective rate: 6.1 years compounded yearly and 5.8 years compounded monthly.
Tax and inflation
The calculator shows growth before tax. Interest on bank deposits is taxed at your slab rate each year, which lowers the rate that compounds. Gains on shares and equity funds are taxed when you sell: 20% if held for up to 12 months, 12.5% above ₹1.25 lakh a year if held longer. Inflation lowers what the final amount buys: 12% growth with 5% inflation is a real return of about 6.67% a year.
Related calculators
- SIP calculator for monthly or weekly investing in stocks and ETFs, with charges and tax
- Max drawdown calculator for the largest fall in an account or strategy
- Stock profit calculator for one share trade after charges and tax
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Frequently asked questions
What is the formula for compound interest?
A = P × (1 + r ÷ n)^(n × t), where P is the starting amount, r the yearly rate, n the number of times interest is added a year and t the years. The interest earned is A − P.
How is compound interest different from simple interest?
Simple interest is paid only on the starting amount. Compound interest is also paid on the interest already added, so it grows faster each year. ₹1,00,000 at 12% for 10 years gives ₹2,20,000 with simple interest and ₹3,10,585 compounded yearly.
Which compounding frequency gives the most?
Daily, then monthly, quarterly, half-yearly and yearly. At 12%, the effective yearly rate is 12.75% daily and 12.00% yearly.
How long does money take to double at 12%?
About 6.1 years compounded yearly, or 5.8 years compounded monthly. The rule of 72 gives 6 years.
Does the calculator include tax?
No. It shows growth before tax. Tax on interest or gains lowers the final amount and, when it is paid every year, the rate that compounds.
Can I use it for stock market returns?
Yes, as a steady path at an average rate. Real returns vary from year to year, and the compound rate of a volatile investment is lower than its average yearly return.
What is the effective annual rate?
The yearly rate after compounding. 12% compounded monthly is 12.68% a year, because each month's interest also earns interest for the rest of the year.
Sources
- Compound interest and effective annual rate: standard formulas, A = P(1 + r/n)^(nt) and (1 + r/n)^n − 1
- Income-tax Act, 2025: capital gains rates on listed equity shares and equity funds, unchanged by the Union Budget 2026-27