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Compound Interest Calculator

See how money grows with monthly contributions, annual step-up and yearly top-ups.

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SIP / Recurring Investment Calculator

Example 1 — Classic SIP

Total invested ≈ ₹9,00,000 · Maturity value ≈ ₹25–26 lakh

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📘 What is the Compound Interest Calculator?

Compound interest is what turns modest, regular saving into significant wealth — Einstein reportedly called it the eighth wonder of the world because growth feeds on itself. This calculator projects your investment's future value with annual compounding, optional monthly contributions, an annual step-up percentage, and shows you the real (inflation-adjusted) value of your final corpus so you understand its true purchasing power, not just the headline number.

⚙️ How Compound Interest is calculated

The compounding formula

The core formula is A = P × (1 + r/n)^(n×t), where P is your principal, r is the annual interest rate (as a decimal), n is the number of times interest compounds per year, and t is the number of years. Each compounding period, interest is calculated not just on your original principal but on the principal plus all interest accumulated so far.

How monthly contributions change the maths

When you add a fixed amount every month, each contribution starts compounding from the day it is invested. This calculator runs a month-by-month simulation rather than a simplified annual approximation, so the total reflects exactly how a real investment account would grow.

What an annual step-up does

A step-up increases your monthly contribution by a fixed percentage every year — for example, increasing a ₹5,000/month SIP by 10% annually means you contribute ₹5,500/month in year two, ₹6,050/month in year three, and so on. Because most people's incomes rise over time, a step-up that tracks salary growth can dramatically increase the final corpus without feeling like a bigger sacrifice.

Why the "real value" number matters

A future value of ₹1 crore sounds impressive, but if inflation runs at 6% for 20 years, that ₹1 crore will only buy what about ₹31 lakh buys today. This calculator shows both the nominal final value and the inflation-adjusted real value side by side, so your planning is grounded in actual purchasing power.

Compound interest (with periodic compounding)

A = P × (1 + r/n)^(n×t)

P = principal, r = annual rate, n = compounding periods per year, t = years

🧮 Worked examples

Example 1 — Lump sum, no contributions

₹1,00,000 invested at 10% annual return, compounded annually, for 10 years.

→ A = 1,00,000 × (1.10)^10 ≈ ₹2,59,374 — more than 2.5× growth

Example 2 — With monthly contributions

₹1,00,000 initial + ₹5,000/month added, at 12% annual return, for 15 years.

→ Final value ≈ ₹26–28 lakh, of which roughly ₹10 lakh is principal and the rest is growth

Example 3 — Step-up impact

Same as Example 2, but with a 10% annual step-up on the monthly contribution.

→ Final value increases by roughly 30–40% over the no-step-up scenario, for the same starting contribution

💡 Original insights & how to use this calculator

Comparing "start now" vs "wait 5 years"

Run this calculator twice — once with your current age and target retirement age, and once assuming you start 5 years later with the same monthly amount. The gap between the two final values is the true cost of delay, and it is almost always far larger than people expect because the lost years were the most valuable compounding years.

Choosing between a lump sum and spreading it out

If you receive a bonus or inheritance, this calculator helps you see the difference between investing it all immediately versus spreading it across 12 months. Generally, investing immediately wins on average because it spends more time compounding — but spreading it out reduces the risk of investing everything at a market peak.

Setting a realistic step-up rate

A step-up rate close to your expected annual salary growth (often 8–12% in early-career years in India) keeps your investment contribution at a roughly constant share of income. Try modelling 0%, 5%, and 10% step-ups to see how sensitive your final corpus is to this single assumption.

Sanity-checking "double your money" claims

The Rule of 72 (72 ÷ rate = years to double) is a quick mental check, but this calculator gives you the exact figure including contributions — useful for verifying whether a return rate someone is promising you is realistic over your investment horizon.