Compound Interest Calculator
Model the 8th wonder of the world with flexible compounding frequencies, starting capital, and regular monthly contributions.
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.
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