ToolFoxCompound Interest Calculator
Calculate how a lump sum grows with compound interest at yearly, half-yearly, quarterly or monthly compounding.
- Maturity value
- ₹1,46,933
- Total interest
- ₹46,933
How it works
Compound interest formula: A = P × (1 + r ÷ (100 × n))^(n × t), where P is the principal, r the annual interest rate as a percentage, t the number of years and n how many times per year interest compounds (1 for yearly, 2 half-yearly, 4 quarterly, 12 monthly). More frequent compounding earns slightly more because interest itself starts earning interest sooner.
Example
A ₹1,00,000 principal at 8% for 5 years compounds to ₹1,46,932.81 when compounded yearly, but to ₹1,48,984.57 when compounded monthly — the extra ₹2,051.76 comes purely from interest compounding twelve times a year instead of once.
Frequently asked questions
Why does monthly compounding give a higher return than yearly at the same rate?
Because interest is calculated and added to the principal more often, so each new interest amount itself starts earning interest sooner — the effective annual rate ends up slightly higher than the stated nominal rate.
Is this the same formula banks use for FDs?
Yes — the FD Calculator on this site uses the same formula with quarterly compounding fixed; this tool lets you pick any compounding frequency for any investment.
What if the interest rate is 0%?
The maturity value equals the principal — no growth occurs, which is the expected edge case of the formula.
Can I use this for loans instead of investments?
This tool models growth of an untouched deposit; for a loan repaid in instalments, use the EMI Calculator instead, since a loan balance reduces with every payment.
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