Compound interest adds unpaid interest to the principal at each rest, so interest earns interest. Added yearly, the total is P × (1 + R/100)^years: ₹1,00,000 at 12% grows to ₹1,25,440 in 2 years, ₹1,440 more than simple interest. Enter years and months or two dates, and see every step.
What is compound interest?
With simple interest, byaj is charged only on the principal. With compound interest, which people also call chakravriddhi, chakravridhi or chakravarti byaj, unpaid interest is added to the principal at each rest (every month, quarter, half-year or year), and from then on it earns interest too.
A = P × (1 + R ÷ k)^(k × T)
A is the total, P the principal, R the yearly rate as a decimal, k how many times a year interest is added and T the years. Compound interest = A − P. Every case, with solved examples: compound interest formula.
| Method | Total | Interest | A year really earns |
|---|---|---|---|
| Simple interest | ₹1,60,000 | ₹60,000 | 12% |
| Added yearly | ₹1,76,234.17 | ₹76,234.17 | 12% |
| Added half-yearly | ₹1,79,084.76 | ₹79,084.76 | 12.36% |
| Added quarterly | ₹1,80,611.12 | ₹80,611.12 | 12.55% |
| Added monthly | ₹1,81,669.68 | ₹81,669.68 | 12.68% |
Over five years, adding interest every year gives ₹16,234 more than simple interest; adding it every month gives ₹21,670 more. The more often interest is added, the faster the total grows, which is why 12% added monthly is really 12.68% a year.
Compound interest between two dates
Choose Dates and enter the day the money was given and the day you want the total for. The calculator counts calendar months from the start date and adds interest to the principal at every full rest. The part rest left at the end earns simple interest on the new principal, with leftover days at 1/30 of a month. Banks treat an incomplete last quarter on a deposit in a similar way, paying interest for the actual days (RBI circular, 2004).
Try it in the calculator₹1,00,000 at ₹2 sekda, yearly rest, from 1 Jan 2026 to a dateInterest on interest on a loan
On a loan, compounding works against the borrower. ₹1,00,000 at ₹2 sekda, left unpaid for 2 years, costs ₹48,000 at simple byaj, ₹53,760 if byaj is added to the principal every year and ₹60,843.71 if it is added every month.
Bank loans: RBI's directions tell banks to charge interest on advances at monthly rests, with some exceptions for farm loans (RBI directions). On an EMI loan each EMI pays that month's interest first, so on-time EMIs leave nothing to compound. Penal charges for late payment are different: banks and NBFCs may not charge interest on them (RBI circular, 2023). Sources checked on 9 October 2026.
The simplest protection is to pay the byaj at every rest: then nothing is added and compound interest costs the same as simple. Whether a private lender may charge compound interest at all depends on state law; see simple vs compound interest.
Try it in the calculator₹1,00,000 at ₹2 sekda, byaj added monthly, for 2 years8 short answersCompound interest questions, answered
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How do I calculate compound interest?
Work out A = P × (1 + R ÷ k)^(k × T), then take away the principal: compound interest = A − P. R is the yearly rate as a decimal, k how many times a year interest is added and T the years. ₹1,00,000 at 12% added yearly for 2 years: ₹1,00,000 × 1.12 × 1.12 = ₹1,25,440. The interest is ₹25,440, against ₹24,000 at simple interest.
How do I use this compound interest calculator?
Enter the amount, the rate (% a year or ₹ sekda a month) and the time, either as years and months or as two dates, then choose how often interest is added. You see the total, the interest, how much of it is interest on interest, and a year-by-year table. Open Step-by-step working for the formula with your numbers and every rest.
How is byaj par byaj worked out on a sekda loan?
At each agreed rest, the unpaid byaj is added to the principal and the next byaj is charged on the new total. ₹50,000 at ₹2 sekda with a yearly rest: year 1 byaj is ₹12,000, so the principal becomes ₹62,000; year 2 byaj is ₹14,880; year 3 is ₹18,451.20. After 3 years ₹95,331.20 is owed, against ₹86,000 at simple interest. Pick ₹ sekda / month as the rate.
How do I work out interest compounded quarterly, half-yearly or monthly?
Divide the yearly rate by the number of rests in a year, and multiply the years by the same number. Quarterly means every 3 months, so 12% a year is 3% a quarter and 2 years are 8 quarters: ₹1,00,000 × 1.03^8 = ₹1,26,677.01. Half-yearly uses 6% for 4 half-years, and monthly uses 1% for 24 months.
Does monthly compounding give more than yearly?
Yes. At the same yearly rate, the more often interest is added, the more it earns. ₹1,00,000 at 12% for one year earns ₹12,000 added yearly, ₹12,360 half-yearly, ₹12,550.88 quarterly and ₹12,682.51 monthly. So the effective yearly rate is 12.36% half-yearly, 12.55% quarterly and 12.68% monthly. At ₹2 sekda added monthly it is 26.82%, not 24%.
Is FD interest compounded quarterly?
Usually, if the FD pays everything at maturity: banks commonly add the interest every quarter, so ₹1,00,000 at 7% grows to ₹1,41,477.82 in 5 years. How banks work it out, step by step: how FD interest is calculated.
In how many years will my money double?
For a quick answer divide 72 by the yearly rate: about 6 years at 12%, where yearly interest really takes 6 years 2 months. The money double calculator gives the exact time for any rate, simple or compound.
Can I use it for EMIs, SIPs or recurring deposits?
No. This calculator grows one amount, with nothing paid in or taken out along the way. With EMIs, each payment cuts the balance, so the interest falls every month: use the EMI calculator. SIPs and recurring deposits add money every month, and each instalment grows for a different length of time, so they need a different formula.
Every figure comes from one tested engine and is exact to the paisa. How we calculate