Investment Details
₹
₹1K₹10Cr
%
0.1%50%
yr
1 yr50 yr
Compounding Frequency
Quick presets
Total Amount (A)
₹1,61,051
After 10 years at 10% quarterly compounding
Principal (P)
₹1,00,000
Compound Interest
₹61,051
Simple Interest (for ref)
₹1,00,000
CI vs SI Gain
₹0
Amount Breakdown
total
₹1.6L
Principal
₹1,00,000
62.1%
Interest Earned
₹61,051
37.9%
Year-by-Year Growth
How your ₹ grows with compound interest each year
| Year | Opening Balance | Interest Earned | Closing Balance |
|---|
Compound Interest Formula
A = P × (1 + r/n)^(n×t)
A= Final amount (principal + interest)
P= Principal (initial investment)
r= Annual interest rate (as decimal, e.g. 10% = 0.10)
n= Compounding frequency per year (1=annual, 4=quarterly, 12=monthly, 365=daily)
t= Time in years
Example
₹1,00,000 at 10% quarterly for 10 years:
A = 1,00,000 × (1 + 0.10/4)^(4×10) = ₹1,64,362
Rule of 72 — Quick Doubling Time
The Rule of 72 is a quick formula to estimate how long it takes to double your money:
Doubling Time = 72 ÷ Interest Rate (%)
6.5% (FD)
≈ 11.1 years
7.1% (PPF)
≈ 10.1 years
10% (Equity)
≈ 7.2 years
12% (MF)
≈ 6 years
Frequently Asked Questions
Common questions about compound interest
What is compound interest in simple words?
Compound interest means earning interest on your interest. If you invest ₹1,000 at 10% p.a., after year 1 you earn ₹100 (total ₹1,100). In year 2, you earn 10% on ₹1,100 = ₹110 — not ₹100. Einstein reportedly called it the "eighth wonder of the world."
How does compounding frequency affect returns?
More frequent compounding = more returns, but the difference is small at typical rates. For ₹1L at 10% for 10 years: Annual compounding → ₹2,59,374; Quarterly → ₹2,68,506; Monthly → ₹2,70,704; Daily → ₹2,71,791. Most Indian bank FDs use quarterly compounding.
What is the effective annual rate (EAR)?
The Effective Annual Rate (EAR) is the actual annual rate after accounting for compounding: EAR = (1 + r/n)^n − 1. Example: 10% nominal rate compounded monthly → EAR = (1 + 0.10/12)^12 − 1 = 10.47%. This is why FDs at 7% quarterly can advertise slightly higher effective yields.
How do mutual funds use compounding?
In growth mutual funds, returns are automatically reinvested — so the fund compounds continuously. This is why staying invested for 15–20+ years in equity funds can turn modest SIP amounts into large corpus. For example, ₹10,000/month for 20 years at 12% CAGR = ₹98+ lakh, vs ₹24 lakh invested.