New Delhi, July 25 -- A monthly investment does not need to look large to become meaningful over a long period. Its eventual value may be influenced by the contribution amount, time available and potential returns earned along the way. Each new instalment adds to the amount already accumulated, while earlier instalments have longer to compound.

This process is gradual. The difference may seem limited during the first few years, but it can become more noticeable as the investment period extends. The outcome, however, depends on the actual rate earned and is not assured.

How compounding works with monthly investments

Compounding means that potential earnings are added to the invested amount. Future potential earnings are then calculated ...