By Admin 
Mutual Fund: Most people investing in mutual funds want their money to grow manifold in the long run. If you have a lump sum amount of Rs 25 lakh today, can this money become Rs 2 crore in future? So the right answer to this question depends on time and returns. The power of compounding in mutual funds shows a big impact in the long run. However, it is important to keep in mind that there is no guarantee of returns in mutual funds and market fluctuations affect the money.
How many years will it take?
Let us assume that you have invested Rs 25 lakh together in an equity mutual fund and you get a return of say 12% every year. In such a situation, you can get Rs 2 crore in 18 years. This means that it will be necessary to wait for a long time to multiply Rs 25 lakh by almost 8 times.
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How long will it take for individual returns?
1. If you get 10% return annually then it may take about 22 years for Rs 25 lakh to become Rs 2 crore.
2. If you get 12% return annually then you can get Rs 2 crore in about 18 years.
3. If you get 15% return annually, then Rs 25 lakh can reach around Rs 2 crore in about 15 years.
How does compounding work to increase money?
The biggest long-term benefit of mutual funds is compounding. In this, you not only get returns on the money you invest, but you also get further returns on the earlier returns. As money appears to grow slowly in the initial years, but as time progresses, the returns on returns start increasing your wealth rapidly.
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