The power of compounding

In continuation of our article on GPF, we will just discuss the power of compounding.

We all have studied the compounding function in our school days and worked out lot of sums in solving such problems.

But whether are we really aware of its effect on our finances and how it affects our finances.

Though volumes and volumes about the power of compounding has been written in various articles appearing in financial dailies

and other news reports, we the government servants have effectively used the power of compounding?

Normally GPF is not used as the way it should be to effectively to reap the benefit.

whereas GPF is used like a savings bank account putting the money and taking out whenever required. If somebody is

consistent and saves money systematically ,the interest generated by the savings multiplies and

brings the fortune.

i have just taken one example of a new recruit say 23 or 24 years saving Rs.4000 per month and continues till retirement.

year	contribution	cumcontribution	interest	total
1	48000	48000	3840	51840
2	48000	99840	7987	107827
3	48000	155827	12466	168293
4	48000	216293	17303	233597
5	48000	281597	22528	304125
6	48000	352125	28170	380295
7	48000	428295	34264	462558
8	48000	510558	40845	551403
9	48000	599403	47952	647355
10	48000	695355	55628	750983
11	48000	798983	63919	862902
12	48000	910902	72872	983774
13	48000	1031774	82542	1114316
14	48000	1162316	92985	1255301
15	48000	1303301	104264	1407566
16	48000	1455566	116445	1572011
17	48000	1620011	129601	1749612
18	48000	1797612	143809	1941421
19	48000	1989421	159154	2148574
20	48000	2196574	175726	2372300
21	48000	2420300	193624	2613924
22	48000	2661924	212954	2874878
23	48000	2922878	233830	3156708
24	48000	3204708	256377	3461085
25	48000	3509085	280727	3789812
26	48000	3837812	307025	4144837
27	48000	4192837	335427	4528264
28	48000	4576264	366101	4942365
29	48000	4990365	399229	5389594
30	48000	5437594	435008	5872602
31	48000	5920602	473648	6394250
32	48000	6442250	515380	6957630
33	48000	7005630	560450	7566080
34	48000	7614080	609126	8223207
35	48000	8271207	661697	8932903
36	48000	8980903	718472	9699375
37	48000	9747375	779790	10527165