Compound Interest Calculator
Calculate compound interest with different compounding frequencies
Details
Enter details and click Calculate
Maturity Amount
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Principal
โ
Interest Earned
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How to Use
- Enter the Principal (initial investment).
- Enter the Annual Interest Rate (%).
- Enter the Time Period in years.
- Select Compounding Frequency โ Monthly, Quarterly, Half-Yearly, or Yearly.
- Click Calculate to see Maturity Amount, Total Interest, and Effective Annual Rate.
The Power of Compounding
Albert Einstein reportedly called compound interest the "eighth wonder of the world." Compounding means interest earned in each period is added to the principal, so future interest is calculated on a larger base. The longer the horizon, the more dramatic the effect.
Formula
A = P ร (1 + r/n)nรt
A = final amount, P = principal, r = annual rate (decimal), n = compounding periods per year, t = years.
Effect of Compounding Frequency
For โน1,00,000 at 8% p.a. over 10 years:
| Frequency | Maturity Amount |
|---|---|
| Annually | โน2,15,892 |
| Half-Yearly | โน2,17,170 |
| Quarterly | โน2,17,825 |
| Monthly | โน2,21,964 |
Rule of 72
Divide 72 by the interest rate to estimate how many years it takes to double your money. At 8% p.a.: 72 รท 8 = 9 years to double. At 12%: only 6 years.