Compound Interest Calculator
Visualize the power of compounding over time.
Parameters
Total Principal
₹ 0
Total Interest
₹ 0
Future Value
₹ 0
Growth Over Time
What is Compound Interest?
Compound interest is the concept of earning interest on interest. Instead of just earning profit on your initial deposit (Simple Interest), your earnings are reinvested to generate their own earnings. This creates a snowball effect that accelerates wealth accumulation over time. Albert Einstein famously called it the 'eighth wonder of the world'.
The formula for compound interest is `A = P(1 + r/n)^(nt)`, where `A` is the future value, `P` is the principal investment, `r` is the annual interest rate, `n` is the number of times interest is compounded per year, and `t` is the time in years. Even small differences in the interest rate or time period can lead to massive differences in the final amount due to the exponential nature of the formula.
This calculator is designed to help you visualize this growth. It separates your total wealth into two buckets: 'Principal' (the money you actually put in) and 'Interest' (the free money your money earned). In the early years, the growth seems slow and linear. But as time passes, the 'Interest' component starts growing faster than your contributions, eventually overtaking the principal. This 'hockey stick' growth curve is the key to successful long-term investing.
We support flexible contribution frequencies (specifically focusing on Monthly vs Yearly compounding) to match real-world scenarios like SIPs (Systematic Investment Plans) or annual fixed deposits. The interactive bar chart updates in real-time, allowing you to instantly see how adding just 5 more years or 1% more interest can double your returns.
1How to Use
- Initial Deposit: Enter the lump sum amount you are starting with today (can be 0 if starting fresh).
- Monthly Contribution: Enter the amount you plan to add to the investment every month.
- Interest Rate: Input the expected annual rate of return (e.g., 7% for conservative funds, 12% for aggressive equity).
- Years to Grow: Use the slider or input to set your investment horizon (longer is better for compounding).
- Compounding Frequency: Select how often interest is calculated (Monthly is standard for most savings accounts).
- Analyze: View the 'Future Value' card to see your final amount.
- Visualize: Check the bar chart to see the purple bar (Interest) outgrowing the light blue bar (Principal) over time.
★Key Features
- Real-Time Visualization: Interactive bar chart showing year-by-year growth breakdown.
- Dual-Component Analysis: Clearly distinguishes between your principal inputs and interest earnings.
- Smart Currency: Automatically detects your locale to display the correct currency symbol (₹, $, €, etc.).
- Flexible Inputs: Supports wide ranges for amounts and tenures suitable for students to retirees.
- Responsive Design: Works perfectly on mobile for quick financial planning on the go.