How to use the Compound Interest Calculator
- Enter the principal amount, interest rate and time.
- Choose how often interest is compounded.
- Press Calculate interest to compare CI and SI.
Compound Interest Calculator formula
Compound: A = P × (1 + r/n)n × t, CI = A − P
Simple: SI = P × R × T ÷ 100
Worked example
₹1,00,000 at 8% for 5 years compounded yearly: A = 1,00,000 × 1.085 ≈ ₹1,46,933, so CI ≈ ₹46,933. Simple interest would be ₹40,000.
Frequently asked questions
What is compound interest?
Interest calculated on the principal plus the interest already earned. It grows faster than simple interest over time.
What is the formula for compound interest?
A = P(1 + r/n)^(nt) and CI = A − P, where n is the number of compounding periods per year.
How is simple interest (byaj) calculated?
SI = P × R × T ÷ 100. Interest is charged only on the original principal.
Does more frequent compounding give more interest?
Yes. Monthly compounding gives slightly more than quarterly, which gives more than yearly, at the same rate.
Where is compound interest used?
Bank FDs, RDs, PPF, loans and most investments use compound interest.