Power of Compounding Calculator
Discover the incredible power of compounding with our interactive calculator. See how your money can grow exponentially over time when returns generate returns.
Watch Your Money Grow
The Magic of Time in Compounding
See how your investment grows over different time periods
Key Compounding Insights
Year-by-Year Compounding Effect
| Year | Opening Balance | Investments | Interest Earned | Closing Balance |
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Key Features
How to Use This Calculator
Understanding Power of Compounding
Albert Einstein reportedly called compound interest the eighth wonder of the world: "He who understands it, earns it; he who doesn't, pays it." Our Power of Compounding Calculator visualizes this incredible wealth-building force.
Compounding means earning returns on your returns. In the first year, you earn returns on your principal. In the second year, you earn returns on your principal plus the first year's returns. This creates exponential growth.
The magic of compounding requires time. In early years, growth seems slow. But as the base grows larger, the absolute returns increase dramatically. A ₹10 lakh investment at 12% grows to ₹31 lakhs in 10 years, but to ₹2.99 crores in 30 years.
Three factors affect compounding power: principal amount, return rate, and time. Of these, time is the most powerful because of the exponential nature. Starting early is the single most important decision for wealth building.
The calculator shows a critical insight: after several years, your accumulated interest exceeds your total contributions. Your money is literally making more money than you are. This is the true magic of compounding.