Compound Interest — Examples and Formula
Compound interest earns returns on both principal and accumulated interest. Formula: A = P(1 + r/n)^(nt). The longer you stay invested, the more powerful compounding becomes.
Examples
₹1L at 8% for 10 years (annual)
A = 100000 × (1.08)^10 → ≈ ₹2,15,892
₹50,000 at 7% for 5 years (quarterly)
n = 4, t = 5 → ≈ ₹70,739
Related Calculators
Frequently Asked Questions
What is compound interest?
Interest calculated on initial principal plus all accumulated interest from previous periods.
Compound vs simple interest?
Simple interest is on principal only. Compound interest grows faster over time.
How often should interest compound?
More frequent compounding (monthly vs annual) yields slightly higher returns at the same rate.
Free calculator?
Use our Compound Interest Calculator on CalculatorWorld.
Real-world use?
FDs, mutual funds, and long-term savings all benefit from compounding.