How this calculator works
Compound growth applies an assumed rate to the balance; monthly deposits join after each month's growth.
- Step 1Start with an amount₹1 lakhyour opening balance
- Step 2Add each month end₹5,000for 120 months
- Step 3Estimate the balance₹11.37 lakhusing the chosen compounding convention
The annual rate is nominal: the selected frequency determines how it compounds. Monthly deposits use the equivalent monthly rate so the full-year growth matches that convention.
What changes with compounding frequency
- Annual8%Effective annual rate; example ending balance ₹11.17 lakh.
- Semiannual8.16%Effective annual rate; example ending balance ₹11.27 lakh.
- Quarterly8.24%Effective annual rate; example ending balance ₹11.33 lakh.
- Monthly8.3%Effective annual rate; example ending balance ₹11.37 lakh.
- Daily8.33%Effective annual rate; example ending balance ₹11.39 lakh.
Worked example
- Effective annual rate
EAR = (1 + j ÷ m)^m − 1- Equivalent monthly rate
i = (1 + j ÷ m)^(m ÷ 12) − 1- Starting amount at the end
P × (1 + i)^n- Month-end deposits at the end
D × (((1 + i)^n − 1) ÷ i)
- Pstarting amount ₹1,00,000
- Dmonthly deposit ₹5,000
- imonthly-equivalent rate 0.67%
- nnumber of months 120
- Effective annual ratenominal rate converted for monthly compounding8.3%
- Amount from starting balanceP × (1 + i)^n₹2.22 lakh
- Amount from monthly depositsD × (((1 + i)^n − 1) ÷ i)₹9.15 lakh
- Estimated ending balancestarting amount growth + deposit growth₹11.37 lakh
- Net interestending balance − total contributed₹4.37 lakh
At a zero rate, monthly deposits add up without growth. The calculator keeps full precision during the calculation and rounds only the displayed figures.
- Total contributed
- Net interest
Rule of 72 and exact doubling time
The Rule of 72 is a quick estimate; the exact doubling time uses the effective annual rate.
- Rule of 728.67 years72 divided by the effective annual rate expressed as a percentage.
- Exact formula8.69 yearsNatural log of 2 divided by the natural log of 1 plus the effective annual rate.
What this estimate leaves out
- Changing ratesThe rate stays constant for the whole period.
- Deposit changesEvery month-end deposit is the same amount.
- Taxes and inflationNeither is deducted or applied to the result.
- Product termsBank or investment rules may use different credit dates and rounding.
Simple or compound interest?
Simple interest is paid only on the original amount; compound interest is also earned on interest already added.
Over one period the two match. After that, compound growth pulls ahead, and the gap widens with the rate and the time. The simple interest calculator puts both side by side.
Banks and schemes fix their own compounding. The FD calculator starts with quarterly compounding and lets you change it, the RD calculator compounds quarterly, and the PPF calculator compounds yearly. For market-linked monthly investing, use the SIP calculator.
Common mistakes
Mistake: Treating the nominal rate as the effective annual rate.
Instead: Read the effective annual rate after choosing a compounding frequency.
Mistake: Assuming the Rule of 72 is exact.
Instead: Compare it with the exact doubling time shown for the same effective rate.
Mistake: Depositing at the beginning of each month in this model.
Instead: The schedule adds each deposit at month end, after that month’s growth.
Mistake: Treating an assumed rate as a guaranteed result.
Instead: Use the rate as a scenario; actual rates and outcomes can differ.
This calculator provides an illustration, not an investment recommendation. Its rate is an assumption, and it does not assess risk, taxes, fees or your personal circumstances.
Checking the method
A separate script recomputes every test case by formula and month by month, and compounds the no-deposit cases period by period.
Measure a past investment’s growth rate with the CAGR calculator, read how we test our calculators, or browse more money calculators.