Power of Rs 4,00,000 One-time Investment: In how many years, Rs 4 lakh lump sum deposit can grow to Rs 4 crore corpus

Let's see in how many years, can an investment grow by 10X, 25X, and 50X. We start with an example of Rs 1,00,000, and see how it may grow at a 12 per cent annualised rate of return.

The investment will take an estimated 21 years to grow to over Rs 10 lakh. In 21 years, estimated capital gains will be Rs 9,80,385 and the estimated corpus will be Rs 10,80,385.

It will take an approximately 29 years for a Rs 1 lakh investment to grow to an estimated corpus of Rs 25 lakh. In 29 years, estimated capital gains will be Rs 25,74,993 and the estimated corpus will be Rs 26,74,993.

It will take an approximately 35 years to grow a Rs 1 lakh investment to an estimated amount of Rs 50 lakh. In 35 years, estimated capital gains will be Rs 51,79,962 and the estimated corpus will be Rs 52,79,962.

Here you can see that it took 21 years for a Rs 1 lakh investment to reach at a Rs 10 lakh corpus.  But the 25X goal was achieved in next 8 years, and the 50X in just 6 years.

Such kind of fast growth happens because of the power of compounding where an investor gets return on return. Here, comes the next big question- can a small investment amount create a larger corpus than a large amount? Let's analyse this statement.

The first investment amount of Rs 2 lakh is 1/8th of the second amount. We are expecting a 12 per cent annualised return on both investments. While the investment duration for the Rs 2 lakh investment is 35 years, the duration for the Rs 16 lakh is 16 years. Let's see what kind of results are possible during those time frames.

In 35 years, estimated capital gains from a Rs 2,00,000 one-investment will be Rs 1,03,59,924 and the estimated corpus will be Rs 1,05,59,924. In 16 years, estimated capital gains from a Rs 16,00,000 one-investment will be Rs 82,08,630 and the estimated corpus will be Rs 98,08,630.

If you compare capital gains, the Rs 2 lakh investment returns are far ahead of returns from Rs 16 lakh investment. It also shows that the investment duration plays a key role in compound growth of an investment.

We will calculate that in how many years, can a Rs 4,00,000 one-time investment generate a corpus of Rs 40 lakh and Rs 4 crore. We will show the growth in different phases. We will take 12 per cent as annualised growth.

In 20 years, estimated capital gains will be Rs 34,58,517 and the estimated corpus will be Rs 38,58,517.

It will take an estimated 31 years to achieve that goal. In those years, estimated capital gains will be Rs 39,21,539 and the estimated corpus will be Rs 43,21,539.

In 40 years, estimated capital gains will be Rs 3,68,20,388 and the estimated corpus will be Rs 3,72,20,388.

It ill take an estimated 41 years to achieve that goal. In those years, estimated capital gains will be Rs 4,12,86,834.76 and the estimated corpus will be Rs 4,16,86,834.76.