Rule of 72 for investment: Are you curious about how quickly your investments can grow? When you allocate your hard-earned money into any financial avenue, a common query emerges: How long will it take for my money to double?
Luckily, there’s a simple method to estimate this: the Rule of 72. According to ET, this rule provides a quick calculation to determine the approximate time required for your investment to double in value.
Here’s how it works: To understand the Rule of 72, divide 72 by the expected annual rate of return.
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For example, if you invest Rs 1 lakh in an investment with an expected 8% annual return, divide 72 by 8 to get 9. This means it will likely take about nine years for your money to double, growing to Rs 2 lakh.
But what if you aim higher, aiming to quadruple return? Enter the Rule of 144.
The Rule of 144 functions similarly, offering an approximation of the time needed to quadruple your investment. To find out how long it will take for your investment to quadruple, use the Rule of 144. Instead of 72, you use 144.
For example, if your annual return is 9%, divide 144 by 9, which equals 16. This means it will likely take 16 years for your money to grow four times at a 9% annual return.
Luckily, there’s a simple method to estimate this: the Rule of 72. According to ET, this rule provides a quick calculation to determine the approximate time required for your investment to double in value.
Here’s how it works: To understand the Rule of 72, divide 72 by the expected annual rate of return.
ALSO READ | How to be a crorepati! Use this simple SIP trick to save over Rs 1 crore with just over Rs 5,000 investment per month
For example, if you invest Rs 1 lakh in an investment with an expected 8% annual return, divide 72 by 8 to get 9. This means it will likely take about nine years for your money to double, growing to Rs 2 lakh.
But what if you aim higher, aiming to quadruple return? Enter the Rule of 144.
The Rule of 144 functions similarly, offering an approximation of the time needed to quadruple your investment. To find out how long it will take for your investment to quadruple, use the Rule of 144. Instead of 72, you use 144.
For example, if your annual return is 9%, divide 144 by 9, which equals 16. This means it will likely take 16 years for your money to grow four times at a 9% annual return.
