Compound interest means you earn interest on your interest, so money grows faster the longer you leave it. These examples show the effect clearly. Try your own numbers in the calculator.
What ₹1 lakh grows to (one-time, compounded yearly)
| Rate | 10 years | 20 years | 30 years |
|---|---|---|---|
| 7% | ₹1,96,715 | ₹3,86,968 | ₹7,61,226 |
| 10% | ₹2,59,374 | ₹6,72,750 | ₹17,44,940 |
| 12% | ₹3,10,585 | ₹9,64,629 | ₹29,95,992 |
What $10,000 grows to
| Rate | 10 years | 20 years | 30 years |
|---|---|---|---|
| 7% | $19,672 | $38,697 | $76,123 |
| 10% | $25,937 | $67,275 | $174,494 |
| 12% | $31,058 | $96,463 | $299,599 |
Three lessons from the tables
- Time does the heavy lifting. At 10%, the money grows 2.6 times in the first 10 years but 17 times over 30 years.
- Small rate differences add up. Over 30 years, 12% gives about four times as much as 7%.
- Starting early beats investing more later. The last 10 years add more than the first 20 combined.
Frequently asked questions
What is the compound interest formula?
Amount = principal × (1 + rate ÷ n)n × years, where n is how many times a year interest is added. With yearly compounding, n = 1.
Are 10% or 12% returns realistic?
Bank deposits pay much less. Stock-market investments have returned more over long periods in many countries, but returns vary a lot from year to year and are not guaranteed.
Related: Investment (SIP) calculator · Simple interest calculator