I am thinking to start investing monthly and i am trying to calculate my investment using excel with a compound interest of 5% monthly plus addition of certain amount.

First month investment is 10000 and from second month onwards i add monthly certain amount (1000/month or 5000/month).

But I am getting this weird result (spreadsheet attached)

if I invest 1000/month (sheet 1) after 3 years I get 3.39 times more profit comparing to 5000/month (sheet 2) which was just 2.8.

Assuming my calculation are not wrong, is it better to invest only a small amount monthly.


The problem is the way you compute profit, in which you are not accounting for the timing of cashflows.

If you compute NPV's you get a better comparison. Also if you check the IRR, it will be 5% for both investments.


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