While investing in any scheme, we all have only one thing in mind and that is profit. If we get an idea of how much profit we will get by investing in that scheme for how long, then it will be easy to decide on investment. Here is the formula of calculation which can easily tell you when your amount will double, triple, and quadruple. In such a situation, you can decide on investing in a scheme thoughtfully.
When will the amount double, understand from this formula
The first formula is Rule 72. This formula is considered very important from the investment point of view. This formula shows how much time your amount will double. Most experts consider it to be a fairly accurate formula of calculation. To apply this formula, you should know about the annual interest received on a scheme. After this, you have to divide that interest by 72. This lets you know how much time your money will double.
Understand with an example.
Suppose you invest in Post Office FD for 5 years. Currently, it is getting 7.5 percent interest. In such a situation, when you divide the current interest rate by 72, the answer will be 72/7.5= 9.6. In this way, according to the calculation, your money will double in 9 years and 6 months i.e. about 10 years.
This formula will tell when the money will triple.
If you want to know when your money will triple, then the Rule of 114 will be useful for you. This formula is similar to the Rule of 72 and is used in the same way for calculation. Let us take the example of Post Office FD here as well. To know how much time your money will triple in Post Office FD, you will have to use the formula of 114/7.5. After calculation, the answer will be 15.2 i.e. at a 7.5% interest rate, your invested money will become three times in 15 years and 2 months.
Calculate with this formula when the amount will quadruple.
Rule 144 tells you how much time your deposited amount in a scheme will quadruple. Suppose you are investing in a scheme in which you are getting 6% interest, then 144/6 = 24 i.e. your amount will quadruple in 24 years. Whereas if the interest rate is 7.5%, then it will take 19 years and 2 months for the amount to quadruple and if the interest rate is 8%, then the amount will quadruple in 18 years.
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