Planning calculator
Interest Calculator: Simple & Compound Interest
Calculate simple or compound interest on any amount. Choose how often interest compounds and see the maturity value, the interest earned and how the balance grows each year.
Maturity value
₹1.41 lakh
₹1,00,000 at 7% a year for 5 years, compounded quarterly
- Principal
- ₹1 lakh
- Interest earned
- ₹41,478
- Maturity value
- ₹1.41 lakh
- Amount invested
- Estimated growth
Compound interest: A = P × (1 + r/n)^(n × t), where n is the number of compounding periods a year. Interest also earns interest. Before tax. Actual interest depends on the product’s terms.
Want to talk through these numbers?
How to use the interest calculator
- 1
Choose simple or compound interest.
- 2
Enter the principal amount, annual interest rate and time period.
- 3
For compound interest, choose how often interest is added: yearly, half-yearly, quarterly or monthly.
Example
₹1 lakh at 7% a year for 5 years becomes ₹1,35,000 with simple interest, and about ₹1,41,478 with quarterly compounding.
Simple interest vs compound interest
Simple interest is earned only on the original amount: A = P × (1 + r × t). Compound interest is also earned on interest already added: A = P × (1 + r/n)^(n × t), where n is the number of compounding periods a year.
The more often interest compounds, the higher the maturity value at the same rate. Over long periods, the difference between simple and compound interest becomes substantial, which is why starting early matters.
Where you'll see each kind
Many bank fixed deposits compound interest quarterly, while some loans and bonds pay simple interest. Always check the product's terms, and remember that interest income is usually taxable.
Frequently asked questions
What is the difference between simple and compound interest?
Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus interest already earned, so the balance grows faster over time.
How does compounding frequency affect returns?
At the same annual rate, more frequent compounding (for example, monthly instead of yearly) gives a slightly higher maturity value, because interest starts earning interest sooner.
Does the calculator include tax?
No. It shows the pre-tax value. Interest income is generally taxable according to your income-tax slab.
Want to talk through your numbers?
A calculator gives you a starting point. We can help you understand what it means for your situation, with no obligation.
More calculators
All calculators- Lumpsum CalculatorEstimate how a one-time (lumpsum) investment could grow over time at an assumed rate of return, with a year-by-year view of its value.
- SIP CalculatorEstimate how a monthly Systematic Investment Plan (SIP) in a mutual fund could grow over time. Change the monthly amount, expected return and period to see the effect instantly.
- Goal CalculatorFind out roughly how much you may need to invest every month to reach a target amount by a certain date, after allowing for what you have already saved.