The formula
Future value = P × (1 + r)t
₹1,00,000 at 12% a year for 10 years becomes ₹3,10,585. In 20 years it becomes ₹9,64,629. Compounding means the second ten years add far more than the first ten.
Rule of 72
Divide 72 by the yearly return to estimate how many years your money takes to double. At 12% it is 6 years; at 7% (a typical FD) about 10 years; at 4% (a savings account) 18 years.
Lumpsum or SIP?
Use this calculator for a bonus, an inheritance or maturity money. If you would worry about investing just before a fall, put it in a liquid fund and move it into equity through a 6–12 month systematic transfer plan (STP).
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Questions people ask
What is CAGR?
CAGR is the compound annual growth rate: the steady yearly return that turns your starting amount into the final amount. It is the rate this calculator uses.