Interest & CAGR Calculator

Interest paid only on the amount you started with. ₹1,00,000 at 8% pays ₹8,000 every year for as long as the deposit runs, and the ₹8,000 never itself earns anything. The formula is principal × rate × years ÷ 100. It is the arrangement behind most short-term personal and vehicle loans, and behind the interest a court or a tax refund pays.

Interest that is added back to the principal, so the next round of interest is worked out on a larger amount. ₹1,00,000 at 8% pays ₹8,000 in the first year, then 8% of ₹1,08,000 in the second, and so on. The formula is P(1 + r/n)^(n×t), where n is the number of times a year the interest is added.

Very little over a year and a great deal over twenty. The gap widens as a curve, not a line, because each year compounds on a base that is already larger than the last. The calculator prints the difference in rupees and also as the simple-interest rate you would have had to be offered to match it, which is usually the more honest comparison.

Fixed deposits compound quarterly, which is why a 7% FD pays slightly more than 7% over a year. Savings accounts calculate interest daily on the closing balance and credit it quarterly. Recurring deposits compound quarterly on each instalment separately. Post office schemes differ by scheme — NSC and KVP compound yearly, PPF is credited yearly, and the Monthly Income Scheme pays out instead of compounding.

The more often interest is added, the more of the year it spends earning on itself. 8% compounded yearly is 8%; half-yearly it is 8.16%; quarterly 8.24%; monthly 8.30%; daily 8.33%. The gain from stepping up the frequency shrinks each time — there is a ceiling, and daily is already within a whisker of it.

The once-a-year rate that would leave you in exactly the same place as the quoted rate compounded several times a year. It is the number that makes two offers comparable when one compounds quarterly and the other monthly. The calculator shows it beside the frequency selector, and banks call the same idea the annualised yield.

The compound annual growth rate: the single steady rate that would have taken a starting value to an ending value over a given period. ₹5,00,000 becoming ₹12,00,000 in five years is a CAGR of 19.1%. It is point-to-point by construction — it reads only the two ends and the time between them, and nothing about what happened in between.

Absolute return is total growth with no reference to time: ₹5,00,000 to ₹12,00,000 is 140%, whether that took two years or twenty. CAGR divides that growth across the years in the compounding sense, so two investments held for different lengths of time can be compared. A large absolute return over a long period is often a modest CAGR.

Because real holdings rarely run in whole years. Bought on 14 March 2019 and sold on 2 August 2026 is 7.39 years, and rounding it to seven overstates the CAGR. Entering the two dates measures the window exactly. A year is counted as 365.25 days, which is what keeps leap years from quietly adding growth.

No, and the difference matters as soon as money moves more than twice. CAGR takes one amount in and one amount out. XIRR handles any number of cashflows on any dates, which is what a SIP, a top-up or a partial withdrawal produces. Use CAGR for a lumpsum held untouched; anything with instalments needs XIRR.

Yes. If the ending value is below the starting value the rate is negative, and it describes the steady annual decline that would have produced that fall. The calculator reports it as it is rather than flooring it at zero — a loss annualised is still the honest figure.

No. Every figure here is before tax and in nominal rupees. Interest on a deposit is taxed at your slab rate in the year it accrues, and capital gains on an investment are taxed when you sell. Inflation then takes a further bite out of whatever is left, so a 7% deposit in a 6% inflation year is barely standing still.