💰 Interest Calculator
Calculate Simple Interest and Compound Interest with yearly, half-yearly, quarterly, or monthly compounding. Perfect for investments, loans, and financial planning.
Simple Interest
P × R × T / 100
Linear growth
Compound Interest
P(1 + r/n)^(nt)
Exponential growth
Rule of 72
72 ÷ Rate
Doubling time (years)
Power of Compounding
₹1L @ 12%
₹3.48L in 10 years
Enter Details
More frequent compounding = higher returns
Total Interest Earned
₹ 4,693
Compound Interest (Quarterly)
Investment Summary
Interest Comparison
Simple Interest
₹ 4,000
Compound Interest
₹ 4,693
Compound interest gives ₹693 more than simple interest
Rule of 72
At 8% interest rate, your money will double in approximately 9.0 years (72 ÷ 8 = 9.0)
📚 Simple vs Compound Interest - What's the Difference?
Simple Interest
Interest is calculated only on the principal amount. It remains constant over time.
Formula: SI = (P × R × T) / 100
Best for: Short-term loans, simple savings accounts
Compound Interest
Interest is calculated on principal + accumulated interest. "Interest on interest" effect.
Formula: A = P(1 + r/n)^(nt)
Best for: Long-term investments, retirement planning, FDs
💡 The Magic of Compounding
Example: ₹10,000 invested at 10% for 20 years
- • Simple Interest: ₹30,000 (Total = ₹40,000)
- • Compound Interest (Quarterly): ₹72,890 (Total = ₹82,890)
- • Difference: ₹42,890 more with compounding!
The longer you invest, the more powerful compounding becomes.
❓ Frequently Asked Questions
What is the difference between simple and compound interest?
Simple Interest: Interest is calculated only on the principal amount. It's linear growth.
Compound Interest: Interest is calculated on principal + previously earned interest. It's exponential growth and yields higher returns over time.
What is the Rule of 72?
The Rule of 72 is a quick way to estimate how long it takes for your money to double at a given interest rate. Simply divide 72 by the interest rate. For example, at 8% interest, money doubles in 72 ÷ 8 = 9 years.
How does compounding frequency affect returns?
More frequent compounding (monthly vs yearly) gives higher returns because interest is calculated and added more often. For a given rate, monthly compounding yields the highest returns, followed by quarterly, half-yearly, and yearly.
Why is compound interest called the "eighth wonder of the world"?
Albert Einstein reportedly called compound interest the eighth wonder of the world because it allows money to grow exponentially over time. Starting early and staying invested can turn small savings into large wealth through the power of compounding.