Compound Interest Calculator
Calculate compound interest with various compounding frequencies.
1%30%
1 year30 years
Maturity Amount
₹1.61 L
Principal
₹1.00 L
Total Interest
₹61,051
Effective Annual Rate (EAR)
10.00%
Nominal Rate
10%
Due to yearly compounding, the effective rate is higher than the nominal rate.
Compound Interest Advantage
With Compound Interest
₹1.61 L
With Simple Interest
₹1.50 L
Extra earnings with compound interest: ₹11,051
Principal vs Interest
Principal (62.1%)Interest (37.9%)
Year-wise Breakdown
| Year | Opening | Interest | Closing |
|---|---|---|---|
| 1 | ₹1.00 L | ₹10,000 | ₹1.10 L |
| 2 | ₹1.10 L | ₹11,000 | ₹1.21 L |
| 3 | ₹1.21 L | ₹12,100 | ₹1.33 L |
| 4 | ₹1.33 L | ₹13,310 | ₹1.46 L |
| 5 | ₹1.46 L | ₹14,641 | ₹1.61 L |
Understanding Compound Interest
Formula
A = P(1 + r/n)^(nt)
- A = Final amount
- P = Principal
- r = Annual interest rate
- n = Compounding frequency per year
- t = Time in years
Power of Compounding
Higher compounding frequency leads to higher returns. The difference becomes more significant over longer periods and with higher interest rates.
This is why Albert Einstein reportedly called compound interest "the eighth wonder of the world."