Formulas
How to Use
Enter the initial amount and the annual rate of interest.
Enter time in years and choose how often interest is compounded.
See CI, total amount and how much more you earn compared to simple interest.
Frequently Asked Questions
A = P × (1 + R/n/100)^(n×T), where P = Principal, R = Annual Rate %, n = number of times compounded per year, T = Time in years. CI = A − P.
Interest is calculated and added twice a year. The formula becomes A = P × (1 + R/200)^(2T). The effective rate is slightly higher than the nominal annual rate.
For 2 years: CI − SI = P × (R/100)². For 3 years: CI − SI = SI × (R/100 + R²/10000 + ...). These shortcuts are frequently tested in SSC and IBPS exams.
Effective annual rate = (1 + R/200)² − 1 × 100 = (1.05)² − 1 = 10.25% per annum. This is higher than the nominal 10% because interest compounds twice a year, earning interest-on-interest within the same year.
A = P × (1 + R/100)^T → 1331 = P × (1.1)³ = P × 1.331 → P = 1331 / 1.331 = ₹1000. Recognising perfect cubes and powers of common rates (1.1³ = 1.331, 1.2² = 1.44, 1.25² = 1.5625) helps solve CI questions much faster in exams.
The Rule of 72 is a mental math shortcut: divide 72 by the annual CI rate to estimate how many years it takes to double your money. At 8% p.a., money doubles in ≈ 72 ÷ 8 = 9 years. At 12%, it doubles in 6 years. While not an exam formula, understanding it helps verify CI answers quickly and builds number sense for compound growth questions.