Calculate compound interest on any principal amount. Compare monthly, quarterly, half-yearly and yearly compounding to see how frequency affects your returns.
A = P × (1 + r/n)^(n×t)
Where: A = Final amount, P = Principal, r = Annual rate, n = Compounding frequency, t = Time in years
Simple interest is calculated only on the principal. Compound interest is calculated on principal + accumulated interest. Over time, the difference becomes massive — this is the "eighth wonder of the world."
More frequent compounding = more returns. Monthly compounding gives slightly more than quarterly, which gives more than yearly. For FDs in India, most banks compound quarterly. Mutual funds effectively compound daily.