Interest Details
Your Results
Year-wise Growth
Simple Interest| Year | Interest Earned (Year) | Cumulative Interest | Amount at Year End |
|---|
Simple vs Compound: Simple interest is calculated only on the original principal, so your money grows in a straight line. Compound interest is calculated on the principal plus previously earned interest, so it grows faster the longer you stay invested — the gap widens with time and with higher compounding frequency. This is why bank Fixed Deposits (FDs) and Recurring Deposits (RDs) in India, which typically compound quarterly, usually earn more over the same period than a simple-interest instrument at the same headline rate.
How Simple & Compound Interest are Calculated
Simple Interest (SI) is charged or earned only on the original principal for the entire time period, never on interest already accumulated. Compound Interest (CI) is charged or earned on the principal plus all interest accumulated so far, so it grows faster the longer the money stays invested.
The two formulas
Simple Interest: SI = P × R × T / 100, Total Amount = P + SI
Compound Interest: A = P × (1 + r/n)n×t, CI = A − P
P is the principal, R/r is the annual interest rate, T/t is the time in years, and n is the number of times interest compounds per year (1 for annually, 4 for quarterly, 12 for monthly).
Why does compound interest grow faster?
Simple interest is always calculated on the same fixed principal, so your money grows in a straight line. Compound interest is calculated on principal plus every interest payment already earned, so each compounding cycle earns interest on a slightly larger base than the last — the gap between the two widens the longer you stay invested and the more frequently interest compounds.
What compounding frequency changes
| Compounding | n value | Effect |
|---|---|---|
| Annually | 1 | Interest added once a year — the slowest-growing option at a given nominal rate. |
| Quarterly | 4 | Used by most Indian bank FDs — interest added 4 times a year, each time on a bigger base. |
| Monthly | 12 | Interest added 12 times a year — slightly higher effective yield than quarterly at the same nominal rate. |
How to calculate your interest, step by step
- Choose the Simple Interest or Compound Interest tab depending on what your bank, scheme, or problem uses.
- Enter your Principal Amount, annual Interest Rate, and Time Period in years.
- If using Compound Interest, choose how often it compounds — annually, semi-annually, quarterly, monthly or daily.
- Click Calculate Interest to see your total interest earned and maturity amount.
- Scroll down to see the year-wise growth table, showing interest earned and cumulative amount for each year.
Notes for Indian savers & borrowers
- Interest earned on savings accounts, FDs and RDs is taxable as "Income from Other Sources" — banks deduct TDS if interest exceeds the threshold set by the Income Tax Department.
- For loans, lenders always use compound (reducing-balance) interest rather than simple interest, calculated against a monthly repayment schedule — see the Loan Calculator for EMI-based borrowing.
- This calculator assumes a fixed rate and fixed compounding frequency for the entire duration — it doesn't model TDS deductions or premature-withdrawal penalties.