Simple vs Compound Interest Calculator
See what compounding actually adds over time.
Simple interest is P x r x t. Compound interest is P x (1+r)^t. On ₹1,00,000 at 8% for 20 years, simple interest gives ₹2,60,000 while annual compounding gives ₹4,66,096 — the ₹2.06 lakh difference is compounding alone.
Your Inputs
Compound value
Simple interest value
₹2,60,000
Compounding advantage
₹2,06,096
Formula used
A = P (1 + r/n)^(nt)
How this works
Where each one applies
Simple interest applies to most gold loans, some NBFC products, and interest on delayed tax payments. Compound interest applies to fixed deposits, PPF, EPF, mutual funds and virtually every long-term savings product.
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