Compound Interest Calculator
How it works
Interest is added to the balance every compounding period, and from then on it earns interest too. That is the whole difference from simple interest, and it is why the gap between the two widens the longer the money sits: A = P × (1 + r/n)n·t, where n is how many times a year interest is added.
The effective annual rate collapses the rate and the frequency into one comparable number. Use it when two deposits quote different compounding — it is the only fair way to rank them.
Investing a fixed amount every month rather than one lump sum? The SIP calculator handles that case.
Frequently asked questions
What does the compounding frequency change?
How often earned interest starts earning interest of its own. The same 8% a year is worth more compounded monthly than annually, because each month’s interest joins the balance and compounds for the rest of the term.
What is the effective annual rate?
The single yearly rate that would produce the same result. It is the number to compare two deposits on: 8% compounded monthly is 8.30% effective, so it beats a flat 8.2% even though the headline rate looks lower.
Can I enter a tenure in months?
Enter it as a fraction of a year — 18 months is 1.5. The part-year gets its own row at the end of the table.