What is Rule of 72? Understand the mathematics of doubling money
Rule of 72: Most people invest in various types of investment schemes to double their savings. While investing, first of all they see where it is right to invest and where it is not. First of all think about the safety of money and only then invest. But then the question comes that when the invested money will double. So for this you must know about a formula. This is Rule of 72. Through this you can easily find out when your money will double.
The Kalamkar News, Digital Desk: Whenever we talk about investment, most of the people understand it in simple language as how much money will be earned in a fixed period. Nowadays there are many investment options available in the market . For example, to understand investment easily, many people see how many days their money is doubling. The biggest concern of investors is that when will their money double? If you have also invested in the market and want to know when your money will double, then this news is useful for you.
There is a rule for investment, by which you can find out in how many days the money will double. For this, investment formula number 72 can prove to be of great use. Let us know what is Formula 72 (What is Rule 72) and how to find out in how many days the money will double.
Know what is Rule of 72?
Whenever it comes to getting guaranteed returns, most people prefer bank FD (Fixed Deposit) . Suppose you have made an FD of Rs 5 lakh in a bank. Let us also assume that this bank is giving you interest at the rate of 7.25 percent. In such a situation, if you divide the number 72 by 7.25, you will get 9.93. This means that it will take 9.93 years for your money to double i.e. about 119 months.
If you also want to calculate return on investment and want to know in which type of option the money doubles quickly. For this you will have to apply Rule of 72 formula on your investment. For this, whatever interest you get, divided by 72, will result in doubling your money. We tell you the complete calculation of how much time will be taken for which option.
Let us understand with an example
For this you can look at these investment options
1. Bank FD: Currently, the interest rates on Bank FD have increased and many banks offer interest up to 8 percent. If we look at this interest, your money will double in 9 years.
2. PPF: Interest is being given at the rate of 7.1 percent per annum in PPF (Public Provident Fund) . It will take 10.14 years for your money to double.
3. Sukanya Samriddhi Yojana: The interest in this scheme (SSY) has increased to 8.2 percent since January. If you divide this interest by 72, your money will double in 8.7 years.
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4. Kisan Vikas Patra: 7.5 percent interest is available in this government scheme (Kisan Vikas Patra) . If you divide 72 by this interest, you get 9.6, which means your money will double in 9.6 years.
5. NSC: Currently, 7.7 percent interest is available in National Savings Certificate (NSC) . According to this interest rate, your money will double in 9.3 years.
6. NPS: On an average, 10 to 11 percent interest is available in the National Pension System (NPS) . If you look at an average interest of 10.5 percent, your money will double in 6.8 years.