How to use this tool
- Enter what you have now and how much you plan to add each month.
- Set the yearly interest or expected return, the number of years and how often interest compounds.
- Check the final balance and the table to see how much came from interest.
What compound interest means
With simple interest you only earn on the money you put in. With compound interest, the interest is added to your balance and then earns interest itself. Over short periods the difference is small. Over 20 or 30 years it becomes the larger part of the final amount, which is why starting early matters so much.
The formula
For a single deposit, the future value is A = P (1 + r/n)nt, where P is the starting amount, r the yearly rate, n the number of times interest is added per year and t the number of years. Monthly contributions are added on top, each one growing for the months left until the end.
The rule of 72
A quick mental check: divide 72 by the yearly rate to get roughly how many years it takes to double your money. At 6% that's about 12 years, at 9% about 8 years.
The results assume a steady rate. Stock market returns go up and down from year to year, so use a cautious rate for long-term plans and remember that inflation and tax will reduce real returns.
Investing a fixed amount each month in an Indian mutual fund? The SIP calculator is set up for exactly that.
Frequently asked questions
How does compound interest work?
Interest is added to your balance at set intervals, and later interest is calculated on the new, larger balance, so growth speeds up over time.
Does compounding frequency make a big difference?
Daily compounding earns a little more than monthly or yearly, but the rate and time invested matter far more.
Can I use this as a SIP calculator?
Yes. Enter the monthly SIP amount as the contribution and your expected annual return as the rate.
Are taxes and inflation included?
No. The result is before tax and in today's money terms, so the real value will be lower.