Let us try to find out the quantum of real gain/loss in value of your money with reference to a 8.5% annual rate of inflation that we should normally plan against. A sum of Rs 1,00,000 will be worth the following amounts after the periods mentioned in column 1 at various rates of returns as indicated in the following table:
| After : | At 10% | At 9% | At 8% | At 7% |
| 10 years | 1,14,717 | 1,04,705 | 95,486 | 87,004 |
| 15 years | 1,22,869 | 1,07,140 | 93,306 | 81,154 |
| 20 years | 1,31,601 | 1,09,631 | 91,176 | 75,697 |
| 25 years | 1,40,953 | 1,12,181 | 89,094 | 70,608 |
| 30 years | 1,50,969 | 1,14,790 | 87,060 | 65,860 |
**(Tax Effect Not Considered)
Thus, if you are earning a rate of return lower than the rate of inflation, you will not be actually growing your money...
Similarly, the more the actual growth rate of your money is above or below the inflation rate, the faster your real money will grow or deplete, not proportionately...
