Power of Compounding

By Ramesh Akkineni
One of the most important concepts in investing and in practical life is the power of compounding. One doesn’t need to be a genius for understanding the concept. If a person knows 3 investments, each of which take different times to give a 100% return. Let us say investment A doubles in 5 yrs, B in 10 yrs and C in 3 yrs. After 30 years, for each rupee kept in the investment A he will get 64, in B he will get 8, and in C he will get 1024... There are all kinds of investments in the world that give a variety of returns. Choosing the right one will make a great deal of difference. A small difference at the start will make a lot of difference in the end. Present value of money is lot more than future value. for example: saving 100 rupees now may be equal to saving more than 5000 after 30 years.

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