When we borrow money, we pay interest. When we lend or invest money, we earn interest. Interest is a percentage of the principal for a given time frame. if that interest get added to the principal then This larger principal now generates slightly more interest, and so on … This the power of compounding interest which make our money to work in our favor.

The compounding is the ability to grow an investment by reinvesting the its earnings/interest- was referred to by Albert Einstein as "the eighth wonder of the world." The magic of compounding allows investors to generate wealth over time, and requires only two things: the reinvestment of earnings and time. If we have two investment ideas with slight different rate of interest then in longer period it will have grate difference in corpus.

**CASE #1**

Suppose there are three people A, B and C. All three have decided to invest 10 thousand per month for 20 years. but they have chosen three different investment options on which they earned average return on there investment as 12%, 15% and 17% respectively . The corpus accumulated at the end of 20 years would be 98,92,554 rs ,1,49,72,395 rs and 1,99,46,590 rs. We can easily see the difference in ROI is only 5% yearly but corpus is almost double.

**CASE #2**

As mentioned above that compounding needs time to do the magic. If in the above example B and C have some other commitments towards life so they have not started investment with A. B starts investment after 3 years than A and C starts after the 5 years. All three have earned same return yearly say 12%. After 20 years, the corpus would be 98,92,554 rs, 66,13,078 rs and 49,95,802 rs for A , B and C respectively. C has invest only 5 years less than A but the corpus is reduced to half of A. This is only because C has given only 15 years to his money to grow while A has given 20 years. Hence the time is equally important as ROI. If someone starts early he will be the winner.

**CASE #3**

In above example C starts after 5 years but what if someone invests for 15 years and stay invested for 20 years. Suppose B starts after 5 years and C invest for 15 years but stay invested for 20 years. All three have earned same return yearly say 12%. so after 20 years the corpus would be 98,92,554 rs, 49,95,802 rs and 90,75,857 rs. B&C have invested only 5 years less than A but the corpus of B is reduced to half of A. and the corpus of C is almost 90% that of A.

**Magic of compounding works with time and ROI. So start early and stay invested for longer term.**

It is actually a great and helpful piece of information. as we provide sterile compounding pharmacy at affordable prices. for more info visit our website.

ReplyDeleteWow, What an Outstanding post. I found this too much informatics. It is what I was seeking for. I would like to recommend you that please keep sharing such type of info.If possible, Thanks. power harrow

ReplyDeleteWonderful article. Fascinating to read. I love to read such an excellent article. Thanks! It has made my task more and extra easy. Keep rocking. taxi hoorn

ReplyDeleteEnjoyed reading this article; in fact, everything is explained in detail, the article is fascinating and compelling. Buy Estring Online at reasonable rates.

ReplyDeleteHello I am so delighted I located your blog, I really located you by mistake, while I was watching on google for something else, Anyways I am here now and could just like to say thank for a tremendous post and a all round entertaining website. Please do keep up the great work. 토토사이트

ReplyDeleteI really like your writing style, great information, thankyou for posting. click here

ReplyDeleteI’ve read some good stuff here. Definitely worth bookmarking for revisiting. I surprise how much effort you put to create such a great informative website. 토토사이트

ReplyDeleteYour articles are inventive. I am looking forward to reading the plethora of articles that you have linked here. Thumbs up! 릴게임

ReplyDeleteIt was wondering if I could use this write-up on my other website, I will link it back to your website though.Great Thanks. 88카

ReplyDeleteI have read your article couple of times because your views are on my own for the most part. It is great content for every reader. 파워볼사이트

ReplyDeletePlease let me know if you’re looking for a article writer for your site. You have some really great posts and I feel I would be a good asset. If you ever want to take some of the load off, I’d absolutely love to write some material for your blog in exchange for a link back to mine. Please send me an email if interested. Thank you! 바둑이게임

ReplyDeleteA very awesome blog post. We are really grateful for your blog post. You will find a lot of approaches after visiting your post. 먹튀폴리스

ReplyDeleteI was reading some of your content on this website and I conceive this internet site is really informative ! Keep on putting up. 인디벳

ReplyDelete