Power of Compounding: How Money Grows, With Examples
Updated 5 November 2026
Compounding means your returns earn returns. Over long periods, time matters more than the amount you invest: starting 10 years earlier can beat investing twice as much.
Early start vs bigger amount
| Starts at 25: ₹5,000 a month for 30 years | Starts at 35: ₹10,000 a month for 20 years | |
|---|---|---|
| Money put in | ₹18,00,000 | ₹24,00,000 |
| Value at 12% | ₹1,76,49,569 | ₹99,91,479 |
The early starter puts in less money and ends with more, because the money had 10 more years to compound.
The rule of 72
Divide 72 by the yearly return to find how many years money takes to double: at 6% about 12 years, at 9% about 8 years, at 12% about 6 years.
Try it
Open the SIP calculator and enter your own numbers. Words you don't know are explained in the money glossary.