Case Study: How ₹5 Lakhs Grows Over 5, 10, 15 and 20 Years
Investing a one-time lumpsum amount can turn into serious wealth if you give it enough time to grow. But how fast does money really grow? How different are the results when you invest for 5 years compared to 20 years? And what role does compounding actually play in multiplying your wealth?
In this mega guide, we will explore the exact journey of ₹5,00,000 invested as a lumpsum over four different time frames:
- 5 Years
- 10 Years
- 15 Years
- 20 Years
Not only that, we will break down the investment growth under different return scenarios—conservative, moderate, and aggressive.
If you want to try these numbers yourself, here is a free calculator:
📌 Why This Case Study Matters
We often hear people saying:
- “5 lakh invest panna, enna growth varum?”
- “Long term la compounding power true ah work aaguma?”
- “Realistic return rate enna consider panradhu?”
This article gives you realistic, research-backed and inflation-adjusted projections—not fantasy numbers. Everything is explained in simple language so anyone can understand how wealth grows.
📌 The 3 Return-Rate Scenarios We Will Use
To make this case study realistic, we will use three return-rate assumptions:
- Conservative Scenario – 8%
- Moderate Scenario – 12%
- Aggressive Scenario – 15%
These return expectations are based on long-term stock market data, hybrid fund data, and broad index performance over decades.
📌 Formula Used
We use the basic lumpsum compound interest formula:
A = P(1 + r)^n Where: A = Future value P = Principal (₹5,00,000) r = Annual return rate n = Number of years
📌 Section 1: Growth of ₹5 Lakhs After 5 Years
Short-term compounding gives decent results, but not dramatic results. Here’s exactly how ₹5 lakhs grows:
| Return Rate | Future Value | Total Profit |
|---|---|---|
| 8% | ₹7,34,664 | ₹2,34,664 |
| 12% | ₹8,81,107 | ₹3,81,107 |
| 15% | ₹10,07,141 | ₹5,07,141 |
As you can see, even in just 5 years, ₹5 lakhs grows significantly—especially at higher return rates.
📌 Section 2: Growth of ₹5 Lakhs After 10 Years
The jump from 5 to 10 years is where compounding starts showing real strength.
| Return Rate | Future Value | Total Profit |
|---|---|---|
| 8% | ₹10,79,462 | ₹5,79,462 |
| 12% | ₹15,51,000 | ₹10,51,000 |
| 15% | ₹20,26,900 | ₹15,26,900 |
Notice how the difference between 8% and 15% becomes very large now. This is compounding in action.
📌 Section 3: Growth of ₹5 Lakhs After 15 Years
Long-term investing is where the real magic happens. Your initial ₹5 lakh can turn into triple or even more.
| Return Rate | Future Value | Total Profit |
|---|---|---|
| 8% | ₹15,87,000 | ₹10,87,000 |
| 12% | ₹27,25,000 | ₹22,25,000 |
| 15% | ₹40,37,000 | ₹35,37,000 |
At this point, the aggressive scenario delivers a wealth jump that looks unrealistic—but it’s not. It’s pure math.
📌 Section 4: Growth of ₹5 Lakhs After 20 Years
20 years is the true sweet spot for wealth creation. Here are the results:
| Return Rate | Future Value | Total Profit |
|---|---|---|
| 8% | ₹23,33,000 | ₹18,33,000 |
| 12% | ₹48,30,000 | ₹43,30,000 |
| 15% | ₹81,45,000 | ₹76,45,000 |
Just look at the 20-year 15% return scenario. Your ₹5 lakh investment becomes ₹81 lakh. That’s 16X your money.
📌 Key Insights From This Case Study
- Time matters more than the return rate.
- The difference between 8% and 15% becomes massive after 20 years.
- Even a single one-time investment can build huge wealth.
- Starting early is the biggest advantage.
📌 Inflation Adjustment (Real Returns)
If inflation averages 5%, then:
- 8% return = 3% real return
- 12% return = 7% real return
- 15% return = 10% real return
Even after inflation, long-term investing creates meaningful wealth.
📌 Comparative Chart (Text Based)
Year 8% Return 12% Return 15% Return ------------------------------------------------------- 5 7.34L 8.81L 10.07L 10 10.79L 15.51L 20.26L 15 15.87L 27.25L 40.37L 20 23.33L 48.30L 81.45L
📌 Real-World Application
A 25-year-old investing ₹5 lakhs once can retire at 45 with ₹81 lakhs (if returns stay around 15%). Even at 12%, he can reach ₹48 lakhs.
A 30-year-old investing ₹5 lakhs might use the returns for:
- Buying a home
- Children’s education
- Starting a business
- Retirement planning
📌 FAQs
1. Is 15% return realistic for 20 years?
It is possible but not guaranteed. Equity markets have historically delivered around 12–15% over long durations.
2. What if I invest more than ₹5 lakhs?
You can simply multiply the results proportionally or use our calculator.
3. Which instrument gives the best long-term results?
Equity mutual funds and index funds historically give the highest long-term growth.
4. Should I choose lumpsum or SIP?
Both are good. Lumpsum grows more if invested during favorable market conditions.
5. Is lumpsum safe?
Safety depends on your time horizon. More years = less risk.