Interest Calculator
Calculate simple or compound interest on savings, investments, and loans. Add regular contributions, choose compounding frequency, and see a detailed year-by-year growth breakdown.
Simple & Compound Interest Calculator
📊 Interest Results
💡 Summary
📋 Year-by-Year Breakdown
| Year | Starting Balance | Contributions | Interest | Ending Balance |
|---|
Simple vs. Compound Interest
Simple interest is calculated only on the original principal. It grows linearly over time. For a ₹10,00,000 deposit at 6% for 10 years, simple interest yields ₹6,00,000 (total ₹16,00,000).
Compound interest is calculated on the principal plus accumulated interest, creating exponential growth. The same deposit compounded monthly yields about ₹8,19,397 in interest (total about ₹18,19,397). The more frequently interest compounds, the faster the balance grows.
- Annually: Interest added once per year.
- Monthly: Interest added 12 times per year — most common for savings accounts.
- Daily: Interest added every day — used by many banks.
- Continuously: Theoretical maximum, using the mathematical constant e.
Interest Formulas
Simple Interest:
Compound Interest:
Continuous Compounding:
APY (Annual Percentage Yield):
Interest Calculator FAQ
What is the difference between APR and APY?
+APR (Annual Percentage Rate) is the stated nominal rate without accounting for compounding. APY (Annual Percentage Yield) reflects the actual return after compounding. For example, a 6% APR compounded monthly yields an APY of 6.17%. APY is always ≥ APR. Banks advertise APY on savings (looks higher) and APR on loans (looks lower).
How much difference does compounding frequency make?
+On ₹10,00,000 at 6% for 10 years: Annual compounding ≈ ₹17,90,848, Monthly ≈ ₹18,19,397, Daily ≈ ₹18,22,103, Continuous ≈ ₹18,22,119. The jump from annual to monthly is most significant; after that, returns diminish rapidly.
What is the Rule of 72?
+Divide 72 by the interest rate to estimate how many years it takes to double your money. At 6%: 72 ÷ 6 = 12 years. At 8%: 72 ÷ 8 = 9 years. This quick approximation works well for rates between 2% and 15%.
How do regular contributions affect growth?
+Regular contributions dramatically accelerate wealth building. ₹10,00,000 at 6% for 20 years grows to about ₹32,07,135 alone. Add ₹20,000/month and the total becomes about ₹1,24,70,175 — with ₹58,00,000 in contributions and about ₹56,70,175 in interest.
Is interest earned on savings taxable?
+Yes, in India interest is generally taxable under “Income from Other Sources” unless specifically exempt. Interest from savings accounts and fixed deposits is taxable at your slab rate; TDS may apply above prescribed thresholds. Always verify current limits and exemptions for the relevant financial year.