Compound Interest
See how your investment grows over time with compound interest.
Compound Interest Calculator
Amount in Words
Twenty Nine Thousand Five Hundred Fifteen INR Only
Total Invested
₹17,000
Interest Gained
₹12,515
Understanding the Power of Compounding
Compound interest is often called the "eighth wonder of the world." Unlike simple interest, which is calculated only on the initial principal, compound interest is calculated on the initial principal and also on the accumulated interest of previous periods.
This creates a "snowball effect" where your wealth grows at an accelerating rate over time. Our calculator helps you visualize this growth using either a Monthly SIP (Systematic Investment Plan) or a lump-sum yearly investment strategy.
How to Maximize Your Investment Growth
- Start EarlyThe longer your money stays invested, the more time it has to compound. Even small amounts can grow significantly over 20-30 years.
- Consistency is KeyMonthly contributions (SIPs) help in rupee-cost averaging and build a disciplined savings habit.
- Reinvest GainsTo truly benefit from compounding, ensure your dividends and interest gains remain invested in the portfolio.
Quick FAQs
What is a good rate of return?
Historically, the stock market averages 8-12% annually, while fixed deposits range from 5-7% depending on the country.
Monthly vs Yearly?
Monthly compounding usually results in slightly higher returns over long periods due to more frequent interest calculations.
Formula
A = P(1 + r/n)^(nt)Where A is maturity value, P is principal, r is rate, n is frequency, and t is time.
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