Calculate how your money grows with compound interest over time
| Year | Balance | Contributions | Interest |
|---|
The Compound Interest Calculator is one of the most powerful financial tools for understanding how your money can grow exponentially over time. Unlike simple interest, compound interest allows you to earn returns not just on your initial investment, but also on the interest you've already earned.
Compound interest is the interest calculated on the initial principal and also on the accumulated interest from previous periods. This creates a snowball effect where your money grows at an accelerating rate. The compound interest formula accounts for multiple variables including principal amount, interest rate, compounding frequency, and time period.
Our Compound Interest Calculator is designed to be user-friendly and comprehensive:
Understanding compound interest is crucial for building wealth. The earlier you start investing, the more time compound interest has to work in your favor. Even small regular contributions can grow into substantial amounts over time due to the compounding effect.
Consider two investors: Investor A starts with ₹1,00,000 at age 25 and adds ₹5,000 monthly. Investor B starts with the same amount at age 35. Both earn 8.5% annually. After 30 years, Investor A will have significantly more money due to the extra 10 years of compound growth.
Several factors influence how much your money will grow through compound interest:
To make the most of compound interest, consider these strategies:
The Compound Interest Calculator is valuable for various financial planning scenarios:
Simple interest is calculated only on the principal amount, while compound interest is calculated on both the principal and accumulated interest, leading to exponential growth over time.
Daily compounding provides the highest returns, followed by monthly, quarterly, and annual compounding. However, the difference between daily and monthly compounding is often minimal.
Yes, the Compound Interest Calculator can help you understand how debt grows over time, especially with credit cards and other compound interest loans.
For long-term investments, 7-10% annually is often used as a benchmark, but actual rates depend on your investment choices, risk tolerance, and market conditions.