About the Compound Interest Calculator
Compound interest earns interest on past interest as well as on the principal. ₹1,00,000 at 8% for 10 years grows to ₹2,15,892 compounded yearly, or ₹2,20,804 compounded quarterly.
How it is calculated
A = P × (1 + r/n)^(n × t)
- P is the principal, r the annual rate as a decimal, n the compounding periods a year, t the years.
- Compound interest = A − P.
Worked example
Inputs: ₹1,00,000 at 8% for 10 years, compounded yearly.
Result: ₹2,15,892 final amount, ₹1,15,892 interest.
Frequently asked questions
What is the compound interest formula?
A = P × (1 + r/n)^(n × t). The interest earned is A − P.
How is compound interest different from simple interest?
Simple interest is earned only on the principal. Compound interest is also earned on interest already added, so it grows faster over time.
Does more frequent compounding make a big difference?
It helps, but modestly. The rate and the number of years matter far more.