A worked example: ₹1,00,000 growing at 8% for 10 years
₹1,00,000 invested today, growing at 8% annually for 10 years, becomes ₹2,15,892.50 — a total growth of ₹1,15,892.50, more than the original amount invested.
The formula: FV = PV × (1 + r)^years
The present value compounds by the growth factor (1 + rate) raised to the power of the number of years — each year's growth builds on the previous year's already-grown amount, which is what makes the total growth exceed a simple year-by-year multiplication of the rate.
A shorter, higher-return example: ₹2,50,000 at 10% for 5 years
₹2,50,000 growing at 10% for just 5 years reaches ₹4,02,627.50 — a smaller absolute growth (₹1,52,627.50) than the first example despite a higher rate, since a shorter time horizon gives compounding fewer years to work.
Why this only works for a single lumpsum
This formula assumes one amount invested once, with no further contributions along the way — a fundamentally different (and more complex) calculation applies to a stream of regular monthly investments, which the SIP Calculator handles instead.
What this doesn't account for
This is a nominal future value — it doesn't adjust for inflation eroding purchasing power over the same period. The Inflation-Adjusted Value Calculator shows what a future nominal amount is actually worth in today's terms.