The MathMagic of Compounding or Kaise Banoonga Crorepati:

The Great Indian Dream is to become a Crorepati. The deep-seated nature of the Crorepati phenomenon can be judged from the popularity of the TV program hosted by Amitabj Bachchan titled, "Kaun Banega Crorepati".

Kaun Banega Crorepati provided a pathway to become a Crorepati. However, it was more like playing the lottery followed by answering some esoterica and the chances of many people becoming a crorepati was very small.

In this article we will try to elaborate upon an simple, easy and ethical pathway to become a crorepati. We will use the MathMagic of Compounding to get there.

Consider that you start with Rs. 100,000. If you put into an investment that returns 10% per year you will get Rs. 10,000 as the return in the first year. If you put this return into the same investment then the starting amount for next year will be Rs. 110,000. If you get 10% return on this amount then it will be Rs. 11,000. Now we can start seeing that the return every year is getting larger. If we keep adding these returns to the initial investment the return on returns will keep adding to our initial investment and the amount invested will grow.

Please note that we are not adding any more money from our pocket except the initial investment. The initial investment itself is providing more and more money to provide returns on. Of course, most of you learnt this sometime in highschool or earlier mathematics classes. The point is have you started applying this?

Lets apply it and see.

Years	Money	Return @ 10%
1	INR 100,000	INR 10,000
2	INR 110,000	INR 11,000
3	INR 121,000	INR 12,100
4	INR 133,100	INR 13,310
5	INR 146,410	INR 14,641
6	INR 161,051	INR 16,105
7	INR 177,156	INR 17,716
8	INR 194,872	INR 19,487
9	INR 214,359	INR 21,436
10	INR 235,795	INR 23,579
11	INR 259,374	INR 25,937
12	INR 285,312	INR 28,531
13	INR 313,843	INR 31,384
14	INR 345,227	INR 34,523
15	INR 379,750	INR 37,975
16	INR 417,725	INR 41,772
17	INR 459,497	INR 45,950
18	INR 505,447	INR 50,545
19	INR 555,992	INR 55,599
20	INR 611,591	INR 61,159
21	INR 672,750	INR 67,275
22	INR 740,025	INR 74,002
23	INR 814,027	INR 81,403
24	INR 895,430	INR 89,543
25	INR 984,973	INR 98,497
26	INR 1,083,471	INR 108,347
27	INR 1,191,818	INR 119,182
28	INR 1,310,999	INR 131,100
29	INR 1,442,099	INR 144,210
30	INR 1,586,309	INR 158,631
31	INR 1,744,940	INR 174,494
32	INR 1,919,434	INR 191,943
33	INR 2,111,378	INR 211,138
34	INR 2,322,515	INR 232,252
35	INR 2,554,767	INR 255,477
36	INR 2,810,244	INR 281,024
37	INR 3,091,268	INR 309,127
38	INR 3,400,395	INR 340,039
39	INR 3,740,434	INR 374,043
40	INR 4,114,478	INR 411,448
41	INR 4,525,926	INR 452,593
42	INR 4,978,518	INR 497,852
43	INR 5,476,370	INR 547,637
44	INR 6,024,007	INR 602,401
45	INR 6,626,408	INR 662,641
46	INR 7,289,048	INR 728,905
47	INR 8,017,953	INR 801,795
48	INR 8,819,749	INR 881,975
49	INR 9,701,723	INR 970,172
50	INR 10,671,896	INR 1,067,190

In fifty years time you are a Crorepati! So if your father had invested Rs. 100000 on your behalf when you were born you would be a Crorepati when you were 50! Of course, that might not excite a lot of you. Who wants to be a Crorepati at 50? You want to do that much earlier. Also you father did not invest that kind of money for you when you were born. Finally, which bank today is going to give you 10% returns on your FDs? Agreed!

So we will explore other ways to become Crorepati. But keep in mind the above mathmagic of compounding. With compounding and time on your side any roadpati has a chance to become crorepati. Keep watching this space for Kaise Banoonga Crorepati, Part II...