Compound Interest Calculator

A = P × (1 + r/n)^(n×t) where: A = final amount, P = principal, r = annual interest rate (decimal), n = compounding frequency per year (1=annual, 4=quarterly, 12=monthly, 365=daily), t = years. For monthly contributions, the FV of annuity formula is added: FV = PMT × [((1 + r/n)^(n×t) − 1) / (r/n)].

Divide 72 by the annual interest rate to find how many years your money takes to double. At 6%: 72/6 = 12 years. At 12%: 72/12 = 6 years. At 7%: 72/7 ≈ 10.3 years. This rule is accurate for rates between 4% and 15% and is one of the most useful shortcuts in personal finance.

For moderate rates (6–10%), the difference between annual and monthly compounding is relatively small. At 8% for 30 years on $10,000: annual = $100,627, monthly = $109,357 — a $8,730 difference. Daily vs monthly compounding is even smaller. The rate and time period matter far more than compounding frequency.

For global equity index funds (e.g., S&P 500, Nifty 50, All-World): historical average 8–12% nominal annually. For conservative estimates, use 6–7%. For bonds or FDs: 4–6%. For cash/savings: 3–5%. Always model at a conservative rate (6–7%) when planning long-term goals — assuming 12% sets expectations too high for volatile markets.

Compound interest works against you on debt. A credit card with 20% annual rate compounding monthly means your balance grows rapidly if not paid. The same formula applies: A = P × (1 + 0.20/12)^(12×t). This is why clearing high-interest debt is mathematically equivalent to earning that interest rate risk-free — one of the best guaranteed "returns" available.