Simple interest is paid only on the original principal. Compound interest is paid on principal plus accumulated interest, so it grows faster the longer it runs.
Compound Interest Calculator
Calculate compound growth at any rate with monthly, quarterly or yearly compounding. See the interest-on-interest separately and compare the result with simple interest on the same amount.
Principal
₹1,00,000
Total interest
₹1,15,892
Maturity value
₹2,15,892
Interest on interest
₹35,892
Simple interest would be
₹80,000
Year-by-year balance
| Year | Balance | Interest earned | Simple interest |
|---|---|---|---|
| 1 | ₹1,08,000 | ₹8,000 | ₹8,000 |
| 2 | ₹1,16,640 | ₹16,640 | ₹16,000 |
| 3 | ₹1,25,971 | ₹25,971 | ₹24,000 |
| 4 | ₹1,36,049 | ₹36,049 | ₹32,000 |
| 5 | ₹1,46,933 | ₹46,933 | ₹40,000 |
| 6 | ₹1,58,687 | ₹58,687 | ₹48,000 |
| 7 | ₹1,71,382 | ₹71,382 | ₹56,000 |
| 8 | ₹1,85,093 | ₹85,093 | ₹64,000 |
| 9 | ₹1,99,900 | ₹99,900 | ₹72,000 |
| 10 | ₹2,15,892 | ₹1,15,892 | ₹80,000 |
How the Compound Interest Calculator works
Compound interest adds each period's interest to the principal, so later interest is earned on a bigger base. The more often interest is credited, the faster the balance grows — though the difference between monthly and yearly compounding is small at ordinary rates.
Interest-on-interest is the part of the total interest that simple interest would never pay: total compound interest minus simple interest.
A = P × (1 + r/n)^(n×t) Interest = A − P
- P
- principal
- r
- annual rate
- n
- compounding periods per year
- t
- years
Worked example
- Principal amount: ₹1,00,000
- Interest rate (p.a.): 8%
- Time period: 10 Yr
- Compounding frequency: Yearly
₹1 lakh at 8% compounded yearly for 10 years grows to ₹2,15,892. Simple interest would pay ₹80,000; compounding pays ₹1,15,892 — the extra ₹35,892 is interest earned on interest.