Compounding Lab
Move the sliders.Watch which one actually changes the outcome.
Every rupee you invest keeps earning on what it already earned; that's compounding. A "step-up" means raising your monthly amount each year, often to match a growing income.
Try adding 5 years instead of ₹2,000/month more. Which one moved the final number further?
This Lab shows how a fixed amount invested every month grows when the growth keeps earning its own growth. You choose the monthly amount, the number of years, an assumed yearly growth rate and an optional yearly step-up, and the chart plots the total you put in against the total value it becomes.
How to use this Lab
- Set the monthly investment, from ₹500 to ₹1,00,000.
- Set the number of years, from 1 to 40.
- Set the expected annual growth, from 4 to 25 percent. This is an assumption you choose, not a forecast.
- Optionally switch on a yearly step-up, which raises the monthly amount by 5 to 20 percent each year, the way a growing income might.
- Read the two figures under the chart: what you invested, and what it became. The grey line is your total invested and the green line is the total value.
What to notice
- The gap widens late
- Early on, the two lines sit close together. Most of the growth arrives in the later years, because the growth is being earned on a bigger and bigger pile. Slide the years from 10 to 30 and watch the green line pull away.
- Time and amount do different jobs
- Try adding 5 years, then try doubling the monthly amount, and compare how much each one adds against how much extra money each one needs. Time usually adds more for each extra rupee you put in.
- A step-up is a small change with a large effect
- Raising the monthly amount by a modest percentage each year increases the total invested a lot over 20 years, and the final value follows. Compare it with a flat amount to see why.
Three runs of the Lab (hypothetical, at a steady 10 percent a year)
With ₹2,000 a month for 20 years, you invest ₹4,80,000 and it becomes ₹15,18,738, a little over ₹15 lakh.
Add 5 years, so 25 years at ₹2,000 a month: you invest ₹6,00,000 and it becomes ₹26,53,667. That is ₹1,20,000 more invested for about ₹11.3 lakh more at the end.
Or double the monthly amount to ₹4,000 for the original 20 years: you invest ₹9,60,000 and it becomes ₹30,37,475. That is ₹4,80,000 more invested for about ₹15.2 lakh more at the end.
Both help. The extra years needed far less extra money for each rupee gained, which is the point of the first lesson on compounding: the earliest rupees have the longest to grow.
What this Lab does not show
- The Lab assumes the same growth rate every year. No real investment grows at a steady rate. Real returns go up and down and can be negative, so treat the result as an illustration, not a prediction.
- It does not include tax, fund charges or inflation. A rupee amount in the future buys less than the same amount today, which the Inflation Lab shows separately.
- It does not recommend any rate, product or amount. Maetis does not give investment advice.
Common questions
- Is this a SIP calculator?
- It does the same arithmetic as a SIP calculator: a fixed amount invested each month, growing at an assumed yearly rate. A real SIP into a fund does not grow at a fixed rate, so the real outcome will differ.
- What growth rate should I enter?
- There is no right answer, and the Lab does not suggest one. Try several, including low ones, and notice how much the result depends on the rate you assumed.
- What is a step-up?
- Raising your monthly amount by a set percentage every year, for example when your income grows. The Lab lets you try 5, 10, 15 or 20 percent.
- Why does the value grow faster in the later years?
- Because the growth in any year is earned on everything accumulated so far, including earlier growth. As the pile gets bigger, each year's growth gets bigger too.
- Does it show my real return?
- No. It shows what would happen at the rate you type in. Your real return depends on what you actually invest in and when.