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Let us understand the compounding effect of investing in the National Pension Scheme (NPS) with a simple example. Monthly contribution of ₹10,000, an annual return of 14%, and keeping contributing same amount for next 30 year
Assumptions
Contribution Starting at age of 30, and investor is aggressive, hence it is assumed that 14% Return per year.
- Annual contribution = ₹1,20,000
- Annual return (r) = 14% or 0.14
- Investment period (n) = 30 years
So, the compounded value of the investment, after 30 years with an annual contribution of ₹1,20,000 and an annual return of 14%, would be approximately ₹48,808,4416.
In Conclusion : Investment of 36Lakhs becomes 488Lakhs or 4.88Cr
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