Investment Calculation: If you are thinking about investing to secure the future, then let us tell you that many government and non-government schemes are being run in the market. This includes mutual funds, FD, PPF, equity, etc. All of these are giving returns at the right rate with different options. But the mathematics of estimating investment is also very easy. In this article, we are going to tell you about such a formula, which is called the Rule of 72. With the help of this rule, you can estimate that in how many years it will take for the investment amount by investing anywhere.
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What is the Rule of 72?
Let us tell you that here every investor wants to increase their wealth and achieve financial goals. In this, you can also increase the net worth. Along with this, it may be necessary to arrange for the education and marriage of children or to prepare a retirement fund. Many people are unable to understand how much their invested money has become. To make this problem easy, the Rule of 72 has been created. This is a type of basic calculation, with the help of which investors can estimate in how many years their money will double on any investment. This formula is quite easy.
Know where this formula is applicable?
According to the information, the Rule of 72 is a hand tool. This helps you in estimating. It applies to compound interest and is also quite accurate in the return range of 6 to 10 percent. Its specialty is that it can be applied not only in investment but also in other areas like inflation and GDP growth.
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How does the 72 rule work?
For information, if you make a bank FD of Rs 1 lakh on which you are getting 7 percent annual interest, then according to Rule 72, it will take about Rs 10.28 lakh to double the money. Apart from this, the current interest rate in PPF is 7.1 percent, which means that the investment will double in 10.14 years. Talking about equity, the Nifty 50 has given a return of about 13.5 percent in 2024. At this rate, the money can double in 5.33 years on investment. Apart from this, if an investor invests regularly in mutual funds and assumes an average annual return of 12 percent, then their amount will double in just 6 years.