Compound Interest Calculator

Compound interest is what happens when last year’s interest becomes this year’s principal. Indian school textbooks, bank FDs and “double your money” slides all use some version of A = P(1+r)^t. This tool is that identity with yearly compounding, so a ₹1 lakh principal at 8% for 10 years can be seen as about ₹2.16 lakh, not as a mystery.

The cash-flow question

Students in Ranchi and first-time investors in Nashik mix simple interest with compound interest on the same 8%. The compound page exists so the FD, lumpsum and “rule of 72” conversations have one shared engine. It is not a mutual-fund simulator and it is not a loan EMI.

The maths on this page

A = P(1 + r)^t with P = ₹1,00,000, r = 8%, t = 10 years produces about ₹2,15,892. Interest earned in the model is about ₹1,15,892. If interest were simple at the same 8%, ten years would add only ₹80,000 — the gap is the compounding.

More frequent compounding (quarterly, monthly) raises the effective annual yield for the same nominal rate. This page compounds once per year. For monthly SIP-like flows use the SIP or RD tools.

Inflation is not subtracted. A doubled rupee in 10 years may buy less if prices rose faster than 8%.

₹1 lakh at 8% for a decade in Nashik

Farhan in Nashik wants to see what a ₹1,00,000 gift becomes at 8% compound for 10 years if it sits untouched. The page shows about ₹2,15,892. He then runs the simple-interest tool at the same inputs to show his nephew why the two school formulas disagree.

What a bank still has to confirm

Yearly compounding only. Taxes, expense ratios and default risk are omitted. A corporate deposit at 8% is not the same credit as a government scheme at 8%.

Common questions

How is this different from the FD calculator?

The FD page is the same annual-compound identity aimed at deposit language. This page is the generic math tool for classrooms and “what if” principal questions without calling the product an FD.

Can I model monthly compounding?

Not on this page. Raise the frequency yourself by converting to an equivalent annual rate, or use SIP/RD tools when money is added monthly.

What is the rule of 72 here?

72 divided by the annual rate roughly estimates years to double. At 8%, 72/8 = 9 years, close to the 10-year result of ₹2.16 lakh from ₹1 lakh. It is a shortcut, not a substitute for the formula.