How to convert ₹12,000 into ₹71 lakh? Investing, patience and compounding is the answer
Updated: 23 Sep 2022, 01:40 PM IST
TL;DR.Compounded interest essentially refers to interest on interest. This means interest earned on principal is added to the principal and the future interest is earned on the combined amount, thus adding to the interest earned. We take an illustration to explain this.
While calculating the future value, it is pertinent to factor in inflation. We assumed this to be 6 percent.