Compound Interest Calculator

The power of compounding

Enter your lumpsum amount, expected annual return, time horizon and monthly SIP. The calculator shows your maturity value, total invested, interest earned and a stacked growth chart so you can see how earnings overtake your contributions over time.

Formula

Maturity value = P × (1 + i)ⁿ + PMT × [(1 + i)ⁿ − 1] ÷ i, where P is the lumpsum, PMT is the SIP per period, i is the periodic rate and n is the number of periods.

Tax-saving options such as ELSS mutual funds and PPF let you compound while claiming deductions under Section 80C. This is a projection based on a constant return rate — real market returns fluctuate and are not guaranteed.

Frequently Asked Questions

What is compound interest?

Compound interest is interest earned on both your original amount and on previously earned interest. Over long periods this "interest on interest" effect drives most of your wealth creation.

How is compound interest calculated?

Lumpsum maturity value = principal × (1 + i)ⁿ, where i is the periodic rate and n is the number of periods. A recurring SIP adds an annuity term: contribution × [(1 + i)ⁿ − 1] ÷ i.

What is a SIP and how does it use compounding?

A Systematic Investment Plan (SIP) invests a fixed amount every month, usually in mutual funds. Each instalment compounds for the remaining tenure, so starting early and staying invested makes a large difference to the final corpus.

Which investments help me earn compound returns in India?

Equity and debt mutual funds (via SIP or lumpsum), PPF, EPF and bank fixed deposits all compound your money. ELSS funds and PPF also offer tax benefits under Section 80C.

What return rate should I use?

Use a realistic expected return for your investment. Equity mutual funds have historically delivered around low-double-digit returns over the long term, while FDs and PPF offer lower but more predictable returns. Market returns vary year to year and are never guaranteed.