Compound Interest Calculator — Calculate Compounding Returns Online
Estimate how your investments grow over time through the power of compounding. Enter the lump sum you can invest today, your recurring investment amount, contribution frequency, payment term, total investment horizon, and expected annual return rate to get an instant maturity breakdown and year-by-year schedule.
At least one investment amount (Lump Sum or Regular) must be greater than zero.
| Year | Opening Balance | Annual Contribution | Interest Earned (Year) | Cumulative Invested | Closing Maturity Balance |
|---|
| Calculation Component | Mathematical Formula | Key Variables & Meaning |
|---|---|---|
| Lump-Sum Compound Interest | $A = P \times \left(1 + \frac{r}{n}\right)^{n \times t}$ | $P$ = Initial principal, $r$ = annual nominal interest rate (decimal), $n$ = compounding frequency per year, $t$ = total years invested. |
| Recurring / SIP Compounding | $FV = PMT \times \frac{(1 + i)^N - 1}{i} \times (1 + i)$ | Each regular contribution compounds for its remaining horizon using the effective periodic rate derived from the chosen compounding frequency. |
| Effective Annual Yield (APY) | $\text{APY} = \left(1 + \frac{r}{n}\right)^n - 1$ | Shows the true annual return when interest is compounded semi-annually, quarterly, monthly, or daily. |
| Rule of 72 (Doubling Time) | $\text{Years to Double} \approx \frac{72}{R}$ | At $12\%$ p.a., a lump-sum investment doubles in roughly $72 \div 12 = 6\text{ years}$. |
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Frequently Asked Questions
What is the formula used by the Compound Interest Calculator?
For a lump-sum investment, compound interest is calculated using A = P × (1 + r/n)^(n×t), where P is the principal, r is the annual interest rate, n is the compounding frequency per year, and t is the total years invested. When you also add regular recurring contributions, each contribution compounds over its remaining tenure.
Can I invest for a shorter contribution period and let my corpus stay invested longer?
Yes. Just like standard insurance and wealth planners, you can set your 'Contribution Period' (e.g., 10 years of monthly payments) separately from 'Stay Invested For' (e.g., 15 or 20 years total horizon) to see how your accumulated corpus continues compounding.
How does compounding frequency affect my maturity value?
The more frequently interest is compounded (Monthly or Quarterly vs. Yearly), the higher your Effective Annual Yield (APY), because earned interest starts generating its own interest earlier within each year.