Same fund. Two endings.
Only one of them spends.
Rs 10 lakh compounding at 12 percent for 25 years. The statement and the supermarket disagree on what you have. Illustrative.
| The number |
Value |
| Nominal CAGR (the brochure) | 12.0 |
| Inflation, steady | 6.0 |
| Real CAGR (what you keep) | 5.66 |
| On paper after 25 yr | 1.70 Cr |
| In today's rupees | 39.6 L |
The real rate is not 12 minus 6. It is 1.12 divided by 1.06 minus 1, which is 5.66 percent, not 6. That small gap, compounded 25 years, is its own few lakh. On paper the money is a 17x. In purchasing power it is a 3.96x.