Compound Interest Calculator – Calculate Exponential Wealth & Compounding Multiplier
Calculate compound interest growth with initial principal, regular monthly additions, custom compounding frequencies (Daily to Annual), and year-by-year compounding schedule table.
Year-by-Year Compounding Progression Schedule
Detailed growth of opening capital, annual deposits added, compounded interest generated, and ending balance.
| Year | Opening Balance | Annual Deposit | Interest Earned This Year | Total Cumulative Interest | Ending Balance |
|---|
How to Use this Calculator & Formula Breakdown
Step 1: Input Financial Parameters
Enter your initial deposit and optional monthly addition amount.
Step 2: Instant Client-Side Computation
Set annual interest rate % and investment tenure in years.
Step 3: Analyze Visual Breakdown & Amortization
Choose compounding frequency (Daily, Monthly, Quarterly, Annually) and explore live Chart.js donut chart and schedule table.
Mathematical Algorithm & Formula
Frequently Asked Questions (FAQs)
What is Compound Interest and how does it work?
Compound interest is the interest calculated on the initial principal amount PLUS all accumulated interest from previous periods. It is often described as "interest on interest", creating exponential growth over long investment horizons.
What is the mathematical formula for compound interest with regular monthly deposits?
The complete formula is: A = P × (1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) - 1) / (r/n)], where P is initial principal, PMT is periodic payment, r is annual rate, n is compounding frequency, and t is time in years.
How does compounding frequency (Daily vs Monthly vs Yearly) affect returns?
The more frequently interest is compounded (e.g. daily vs annually), the higher the effective annual yield. For example, ₹10 Lakhs at 10% compounded daily earns more total interest than ₹10 Lakhs compounded annually.
What is the Rule of 72 in compound interest calculations?
The Rule of 72 is a quick mental shortcut to estimate how many years it takes for your investment to double. Simply divide 72 by your expected annual interest rate (e.g. 72 / 12% = 6 years to double your money).
What is the difference between Simple Interest and Compound Interest?
Simple interest is calculated solely on the principal deposit for the entire duration (linear growth). Compound interest is calculated on the running total balance (exponential wealth acceleration).
Can compounding help beat inflation over long retirement horizons?
Yes! When investing in equity mutual funds or diversified index portfolios earning 12%-15% CAGR, compounding significantly outpaces the standard 5%-6% annual inflation rate, preserving and multiplying your real purchasing power.
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