Skip to content

Simple & Compound Interest Calculator

Calculate simple or compound interest with your choice of compounding frequency and compare the two side by side.

Rules last reviewed: September 2026

Disclaimer: Results are estimates for informational purposes only and are not professional financial, tax or legal advice. Rules change — please verify with official sources or a qualified professional before making decisions.

Simple interest vs compound interest

Simple interest is earned only on the original principal. Compound interest is earned on the principal *and* on the interest already added, so your money grows faster the longer it stays invested. Bank FDs, RDs, PPF and mutual funds work on compounding; some personal loans and short-term lending use simple interest.

The formulas

Simple interest: SI = P × R × T ÷ 100
Compound interest: CI = P × (1 + r ÷ n)^(n × t) − P
P = principal · R = annual rate % · T = years · n = times compounded per year
₹1,00,000 at 8%Simple interestCompound interest (yearly)
5 years₹40,000₹46,933
10 years₹80,000₹1,15,892
20 years₹1,60,000₹3,66,096

The gap widens dramatically with time — after 20 years, compounding earns more than twice as much interest as simple interest at the same rate.

The Rule of 72

A quick way to estimate how long compounding takes to double your money: divide 72 by the annual rate. At 8% it takes roughly 72 ÷ 8 = 9 years; at 12%, about 6 years. More frequent compounding — monthly rather than yearly — speeds it up slightly.

Compounding works against you on debt too. Credit-card balances compound monthly, which is why unpaid dues grow so quickly.

Years to double your money

Annual rateYears to double (Rule of 72)
6%12 years
8%9 years
10%7.2 years
12%6 years

Frequently asked questions

Which is better, simple or compound interest?

For an investor, compound interest is better because interest earns interest. For a borrower, simple interest costs less over time. Compare rates and how often interest is compounded.

How does compounding frequency change the result?

More frequent compounding — quarterly, monthly or daily — gives slightly more interest than yearly compounding at the same rate. The difference grows with the rate and the time period.

Which Indian products use compound interest?

Bank FDs (usually quarterly), recurring deposits, PPF (yearly), EPF and most savings certificates use compounding. Equity mutual fund returns compound through reinvested gains.

How is time entered for months or days?

Time is converted into years, so 6 months is 0.5 years. Use the months option for periods shorter than a year.

Can I use this for a loan?

Yes. Enter the loan amount as the principal, and choose the interest type and compounding your lender uses. For monthly instalments on a loan, use the EMI calculator instead.