Compound Interest Calculator

Calculate the future value of your investments with compound interest and monthly contributions.

Investment Details

Initial Deposit

Monthly Contribution

Interest Rate (%)

Duration (Years)

Future Balance

Total Value

Principal Invested

How to use Compound Interest Calculator

1
Enter your Initial Deposit.
2
Add your Monthly Contribution amount.
3
Set the estimated Annual Interest Rate.
4
Adjust the duration to see your wealth growth over time.

Frequently Asked Questions

What is the difference between compound and simple interest?

Simple interest only earns on the principal. Compound interest earns on both the principal and accumulated interest — this "interest on interest" is what makes long-term investing so powerful.

How often does compounding happen?

This calculator uses monthly compounding, which is standard for most savings accounts and recurring deposits. More frequent compounding (daily) yields slightly higher returns.

What is a realistic expected return rate to enter?

For fixed deposits: 6–8%. For balanced mutual funds: 10–12%. For equity mutual funds (long-term, high-risk): 12–15%. These are estimates — actual returns vary.

How do monthly contributions affect the final amount?

Adding a monthly contribution alongside an initial lump sum compounds both — your contributions grow independently over their remaining time horizon. Even small monthly additions significantly increase long-term wealth.

Does this account for inflation?

No — this shows nominal returns. To calculate real returns, subtract the expected inflation rate (typically 5–7% in India) from your expected return rate.

Is my financial data sent to any server?

No — all calculations are performed locally in your browser. Nothing is stored or transmitted.

Detailed Guide

The Math Behind Building Wealth

Compound interest means earning interest on your interest — not just on the money you put in. Over long periods, this creates exponential growth that many people underestimate until they see the numbers.

This calculator lets you model different scenarios: a starting amount, regular monthly contributions, an expected annual return, compounding frequency, and how many years you'll stay invested. The output shows your future value broken into what you contributed versus what the compounding effect added.

The Formula

Lump sum only (no contributions):

FV = P × (1 + r/n)^(n×t)

With monthly contributions:

FV = P × (1 + r/n)^(n×t) + PMT × [((1 + r/n)^(n×t) − 1) / (r/n)]

Where:

P = Starting principal
r = Annual interest rate (as a decimal, e.g., 0.10 for 10%)
n = Compounding periods per year (12 for monthly)
t = Time in years
PMT = Monthly contribution amount

A Concrete Example: Starting Early vs. Starting Late

Scenario	Start	Monthly Contribution	Years	Rate	Total Invested	Final Value
Early start	Age 25	₹5,000	35 years	10%	₹21,00,000	₹1,89,00,000
Late start	Age 35	₹5,000	25 years	10%	₹15,00,000	₹66,00,000
Catching up	Age 35	₹10,000	25 years	10%	₹30,00,000	₹1,31,00,000

The person who started at 25 invested ₹6 lakh less but ended with almost three times more due to the additional 10 years of compounding. The person starting at 35, even doubling their contributions, couldn't match the outcome.

This is why time is the most powerful variable in the equation.

Compounding Frequency: Does It Matter?

Frequency	Effect
Annually	Interest calculated once per year
Quarterly	Each quarter's interest added for the next quarter to earn on
Monthly	Standard for most bank accounts, SIPs, and mutual funds
Daily	Common for savings accounts — marginal difference from monthly

For most practical planning purposes, monthly compounding is the standard assumption. The difference between monthly and daily compounding is usually less than 0.1% over typical investment horizons.