Interest Calculator
Compare Simple Interest vs Compound Interest side by side.
Enter Values
₹
%
years
Compounding Frequency (for CI)
Yearly
Quarterly
Monthly
SI = P × R × T / 100
₹1,40,000
Maturity amount
Principal
₹1,00,000
Interest Earned
₹40,000
Monthly
₹1,48,985
Maturity amount
Principal
₹1,00,000
Interest Earned
₹48,985
Extra vs SI
+₹8,985
Year-by-Year Growth
| Year | SI Total (₹) | CI Total (₹) | CI Advantage (₹) |
|---|---|---|---|
| Year 1 | 1,08,000 | 1,08,300 | +300 |
| Year 2 | 1,16,000 | 1,17,289 | +1,289 |
| Year 3 | 1,24,000 | 1,27,024 | +3,024 |
| Year 4 | 1,32,000 | 1,37,567 | +5,567 |
| Year 5 | 1,40,000 | 1,48,985 | +8,985 |
About Simple vs Compound Interest
Simple Interest (SI)
Simple interest is calculated only on the original principal. Formula: SI = P × R × T / 100. It is used for short-term loans, some FDs, and informal lending. The interest amount is the same every period.
Compound Interest (CI)
Compound interest is calculated on the principal plus accumulated interest, creating exponential growth. Most bank FDs, savings accounts, mutual funds, and home loans use compound interest. Higher compounding frequency means slightly higher returns.
SI vs CI at a glance
For borrowers: simple interest is always cheaper
For investors: compound interest grows wealth faster
At 10% for 10 years: SI = 100% return; CI (annual) = 159%
The gap grows dramatically over 20–30 year time horizons