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Enter principal, rate, time and compounding frequency to see your money grow.
A = P × (1 + r/n)^(n×t), where P is the principal, r the annual rate, n the compounding frequency and t the years. Each period's interest joins the principal, and the next period earns on the bigger amount — interest earning interest.
Worked example: ₹50,000 at 7% for 5 years compounded annually grows to ₹70,128 — versus ₹67,500 with simple interest. Compounding quietly handed you ₹2,628 extra for doing nothing.
₹1,00,000 at 8% compounded monthly becomes about ₹2,21,964 in 10 years, ₹4,92,680 in 20 years and ₹10,93,573 in 30 years. The final decade earns more than the first two combined — starting early beats saving more later.
Frequency matters too: monthly compounding beats annual on the same deposit (₹70,128 vs ₹70,881 on the example above), and bank FDs typically compound quarterly, which this calculator models directly.
Divide 72 by your annual return rate and you get the approximate number of years to double your money: at 8% about 9 years, at 12% about 6, at 6% about 12. The rule is remarkably accurate across the 6-10% band, which covers most real investments, and it works for inflation too — money losing 6% a year halves in purchasing power in about 12 years.
The psychological punchline: over a 40-year career, money doubling every 9 years doubles nearly 4.5 times — 1 lakh becomes about 23 lakh without adding a rupee. Compounding rewards time more than rate, which is why starting early beats starting big.
The oftener interest compounds, the faster the effective rate climbs. On 1,00,000 rupees at 8% for 10 years: annual compounding gives 2,15,892, semi-annual 2,19,112, quarterly 2,20,804, and monthly 2,21,964. Banks and NBFCs quote annual rates but compound monthly, so the effective rate is what actually lands in your account.
Then subtract the silent tax: inflation. With India's long-term inflation averaging around 5-6% (the RBI targets 4% with a 2-6% band), an 8% deposit is roughly a 2-3% real return. A quick approximation is real return = nominal return minus inflation. Compounding works on prices exactly as it works on savings — in both directions.
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