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Compounding L to Cr

Initially, the magic of compounding cannot be seen in a small portfolio. It begins to display its magic once it reaches a certain level. All that is necessary for that is penitence, discipline, and an optimistic mind. Many negative factors can come, but being invested in the market can make a great deal of money.

    Let's move on to the primary topic. When we reach 10L, we begin to observe its outcome. The rule of 72 states that if we have a 24% compound annual return, we can double our money in 3 years (To know the rule of 72, click here ). I know that 24% a year is not an easy task for regular people, but it is not impossible. Such a return is easily achievable if someone invests their time and energy and is truly passionate about it.

    Let's say on 10L we get a 24% return. Then, after a year, we will get using the compounding formula,

        Here, P= 10,00,000/-

                  r=24%

                  n=1

    Our final amount at the 1st year will be 12,40,000/-.

    But we will not receive the interest of 24% at the end of the year. We may get it at any point in the year. So when we use the online compounding calculator, the 24% is divided into twelve equal parts. So, on such a calculation, we get to see that the final amount will be 12,68,241.79/-.

    Now, in the second year, our capital will be 12,68,241/-. Again, we consider that we will get 24%. By putting this on the compounding calculator, we get

            Here , P= 12,68,241/-

                      r= 24%

                      n=1

        Our final amount at the end of second year will be 16,08,437.24/-.

    Now in the 3rd year, our capital will be 16,08,437.24/-. Again, we consider that we will get 24%. By putting this on the compounding calculator, we get

            Here , P= 16,08,437.24/-.  

                       r= 24%

                       n=1

    Our final amount at the end of 3rd year will be 20,39,887.34/-

    Now we can say that our money will double in three years. If we start with any money, it will double in three years.

                Finally, we get

                    1st year=  10L

                    3rd year = 10 X 2= 20L

                    6th year = 20L X 2= 40L

                    9th year = 40L X 2 = 80L

                    12th year = 80L x 2= 1.6 cr

                    15th year = 1.6cr x 2 = 3.2 cr

                    18th year = 3.2cr x 2 = 6.4 cr

                    21th year = 6.4cr x 2 = 12.8 cr

                    24th year =12.8cr x 2= 25.6 cr

                    27th year = 25.6cr x 2 = 51.2 cr

                    30th year = 51.2 cr x 2 =102.4 cr

    We have seen that 10L became 100CR in 30 years. All the great investors in this world made money in this way. It does not require a high level of IQ; we just need to be patient and sacrifice the present for the future.

    I made it easy to understand by neglecting the numbers after five digits. If you want to see the details, I am attaching an image with the details of the calculation.

    Adding an extra 10,000/-, which is only 10,000/-, will have an impact on our return. Let's see the details.

    Here in the image, we have only added a monthly contribution of 10,000/-, which resulted in the final amount being 187 cr.

    Similar to that, if we make a monthly contribution of 20,000 rupees, the final amount would be 249CR

    I am attaching the link .you may go here and check by putting various amount.

    The main point is that getting 24% is not an easy task. It's not meant for those who can't even dedicate three hours to the market. Market research is a full-time job. Not for those who are committed to other occupations and put their money into market by listening to the news, WhatsApp, friends, and so on. So be very careful. Make sure to read a lot and avoid trying to find shortcuts to making money on the market. Stay invested for a long time, and happy investing!


- Shaishab

    



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