Power of Compounding: At 12%, in many years can Rs 7,000/month SIP generate Rs 1.9 crore corpus?

Power of Compounding: Are you looking for an investment option where you can invest money on a monthly basis and accumulate a substantial corpus that will help you meet your future financial needs? If so, mutual funds may be profitable. It is a market-linked, long-term investment that uses the power of compounding to generate interest on interest. Investors can invest small amounts periodically instead of lump sums.

But how does it work? Let's understand with an example -

Suppose you are investing Rs 17,000 monthly in a SIP mutual fund. Assuming an average return rate of 12 per cent, your target is to generate over Rs 1.91 crore corpus in the long term. Now, can you guess how much time it will take? Let's calculate and find -

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So, how much time will it take to generate an over Rs 1.91 crore corpus with a Rs 7,000 monthly SIP?

According to the calculations, you will need to invest in SIP for at least 29 years to generate over Rs 1.91 crore corpus with a Rs 7,000 monthly investment.

Generate Rs 1.91 crore with Rs 7,000 monthly SIP: Calculating total investment

In 29 years, you will invest a total of Rs 24,36,000.

Generate Rs 1.91 crore with Rs 7,000 monthly SIP: Calculating average capital gain

In terms of capital gain, a total of Rs 1,67,40,292 corpus will be received. It should be noted that this is an expected return, and the actual amount may vary depending on the market conditions.

Generate Rs 1.91 crore with Rs 7,000 monthly SIP: Final Corpus Received

Consequently, at the end of 29 years, including the principal investment and capital gain, you will get a total of Rs 1,91,76,292.

Full Calculation: You may become the owner of over Rs 1.91 crore after 29 years

• Total Investment Amount: Rs 24,36,000
• Capital Gains: Rs 1,67,40,292
• Total Approx. Return: Rs 1,91,76,292

(Disclaimer: Our calculations are projections and not investment advice. Do your own due diligence or consult an expert for financial planning.)