Two notes, ten years

Watch both sides.

Last lesson, ₹20,000 sat in a drawer. Now take a second ₹20,000 and **invest** it, where it grows **10% a year**.

After ten years the drawer still holds **₹20,000**. The invested note has grown to **₹51,875**. Look at the bars: each year's step is **bigger** than the one before.

Growth starts to grow

Drag through the years.

Invest ₹10,000 at 10% a year and leave the growth in. Watch the last row.

**Remember:** growth that stays invested earns growth of its own.

This has a name: compounding

Move along the years.

**Compounding** means your growth is added to your money, so next year it grows too. Compare two people with ₹10,000 at 10%: one **leaves the growth in**, the other **takes it out** every year.

Two things decide the growth

Pick a rate, then drag the years.

In the last lesson, **rate** and **time** decided how much cash lost. They decide how much invested money grows, too.

These are example rates. Real investments don't grow by the same amount every year, and some can fall.

Asha and Ravi race to 60

Drag through the ages, or press Play.

Both invest ₹5,000 a month and both get 10% a year. **Asha** invests from 25 to 35, then stops. **Ravi** invests from 35 to 60.

Example figures: ₹60,000 a year, invested at the start of each year, growing 10% a year.

Back to the saver

Switch between the two plans.

Remember the saver who kept ₹20,000 a month as cash for 20 years? Their pay rose 10% a year and costs 8% a year. Now give them a second plan: **invest** what's left over each year at **12%**.

Example figures, worked out year by year from the assumptions above.

Check — Question 3 of 4

Put each one where it belongs.

What you now know

• Invested money can grow, while cash in a drawer stays the same number.
• Compounding: growth left invested earns growth of its own.
• Compounding starts slowly, then speeds up.
• Rate and time both decide the result. Time matters as much as the rate.
• Starting early can beat putting in more later.
• The rates here are examples. Real investments don't grow the same every year.