Compound Interest Calculator
Model the 8th wonder of the world with flexible compounding frequencies, starting capital, and regular monthly contributions.
Important Educational Disclaimer for Calculator Results:
Calculations are estimates based on your entered inputs and selected return or inflation assumptions. Results are illustrative, hypothetical, and not guaranteed. Actual market returns, interest rates, tax liabilities, and inflation rates will vary and may materially alter your final outcome. This calculator does not constitute financial, investment, or tax advice.
Understanding the Power of Compounding
With an initial principal of ₹1,00,000 and ongoing contributions of ₹5,000/month, your total balance reaches ₹13,11,244 in 10 years. Total interest earned is ₹6,11,244.
- Compound interest pays you interest on your principal PLUS all previously accumulated interest.
- More frequent compounding (e.g. quarterly vs annual) yields slightly higher returns due to faster reinvestment.
- Consistency and time matter far more than timing: starting 5 years earlier often doubles the terminal sum.
How This Calculator Works
The compound interest formula calculates future balance based on principal P, annual rate r, frequency n times per year, and time t in years. Regular deposits are factored in at each compounding interval.
A = P × (1 + r/n)^(n×t)Variables in Formula:
Worked Step-by-Step Example
Investing ₹1,00,000 upfront with ₹5,000 monthly additions at 10% annual interest compounded annually for 10 years.
Key takeaway: The earned interest accounts for nearly half of your final wealth, illustrating how money works for you while you sleep.
Common Mistakes to Avoid
⚠ Interrupting compounding unnecessarily
Withdrawing interest gains each year converts compound growth into simple growth, drastically lowering long-term wealth.
⚠ Neglecting inflation
Nominal compound growth of 7% in a fixed deposit sounds safe, but if inflation is 6%, your real purchasing power expands by only ~1% per year.
Frequently Asked Questions
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