📈 Compound & Simple Interest Calculator

Compare simple vs compound interest side by side. See how different compounding frequencies maximize your investment returns.

📊 Interest Calculator

Principal Amount (₹)

₹1,00,000

Annual Interest Rate (%)

Time Period (Years)

5 yrs

Compounding Frequency

📈 Results

Compound Interest — Maturity Amount

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CI Total Interest

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SI Total Interest

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SI Maturity Amount

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Extra via Compounding

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CI vs SI Breakdown

Growth Over Time

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Enter Investment Details

Enter values and click Calculate

Formula

How Interest is Calculated

Simple Interest

SI = P × R × T

Compound Interest

A = P × (1 + R/n)^(n×T)

Where:
P = Principal loan amount
R = Rate (decimal)
T = Time in years
n = Compounding frequency per year

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Power of Compounding

Compound interest earns "interest on interest," causing exponential growth over time. The longer you invest, the bigger the difference becomes.

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Compounding Frequency

More frequent compounding means more growth. Daily compounding yields slightly more than annual compounding on the same principal and rate.

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Rule of 72

Divide 72 by your annual rate to estimate when your money doubles. At 8% per year, your investment doubles roughly every 9 years.

FAQ

Frequently Asked Questions

Common questions about Simple and Compound Interest calculations

What is the difference between simple and compound interest?

Simple interest is calculated only on the principal amount (original investment). Compound interest is calculated on the principal plus accumulated interest, so you earn interest on your interest — leading to faster growth over time.

Which is better: simple or compound interest?

For investors (earning interest), compound interest is better. For borrowers (paying interest), simple interest is better. Always aim to earn compound interest and pay simple interest where possible.

How does compounding frequency affect returns?

More frequent compounding results in slightly higher returns. For example, at 10% p.a.: annually gives 10% return, monthly gives 10.47%, and daily gives 10.52%. The difference becomes larger over longer time horizons.

What is the effective annual rate (EAR)?

EAR is the actual annual return after accounting for compounding frequency. It's calculated as EAR = (1 + r/n)^n − 1. This helps compare investments with different compounding frequencies.

📈 Compound & Simple Interest Calculator

How Interest is Calculated

Power of Compounding

Compounding Frequency

Rule of 72

Frequently Asked Questions

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