# power of compounding

power of compound interest power of compound interest saving your money and want to become rich but do you know that by saving your money in savings account and fixed deposit you are thinking your money is growing but a harsh reality is that your money is not growing and you are just beating inflation which is most time in range of 5-10% same and most of time greater than your saving account interest and almost equal or similar to your fixed deposit rates. Read the full article to see power of compound interest. thus actually your money is not appreciating and it is depreciating most time by putting in savings or fixed deposit or in traditional ways giving return 5-10% or return less than even inflation. power of compounding power of compounding on money or investment simply means interest on the interest plus the principal amount that you have invested. lets you understand by a example suppose you have 100$ to invest and in the first year you are expecting 15% per annum or in the first year and in the second year the base or principal of investment is 115$ and then 15% interest will be calculated on that 115$ which is now the principal amount and at the end of second year the principal amount will be 132.25$ and the process continues. it will seem small when seen on a small amount and also mainly when seen for a short span of time. but when seen on a large span of time the compounding can just show magic or power. suppose in india at the age of 25 you have 10,00,000rupees and you have to retire at age of 55 so you will have almost 100,10,00,000 rupees almost 14 million dollar which will put you in world richest 1% if in compounding you are doubling your money every three years. power of compound interest suppose you have 10,00,000 money of any currency in first year and you are able to double your money every three year 28 th birthday) 20,00,000 31 th birthday)40,00,000 34 th birthday) 80,00,000 37 th birthday)1,60,00,000 40 th birthday) 3,20,00,000 43 th birthday) 6,40,00,000 46 th birthday)12,80,00,000 49 th birthday) 26,60,00,000 52 th birth day) 53,20,00,000 55 th birth day) 106,40,00,000 and for this magic to happen you have to compound your money at approximately 22-26% range which is just some bigger than average return of index of stock markets of most countries and wait this in is index return the stock return of a company can be manifold so just start using power of compounding from today.