Rule 72 Investment Formula : Whenever you do financial planning, you are always worried about whether you will be able to save enough for the goal for which you are saving in the stipulated time period or not. For example, whether there will be enough funds for the higher education of children 10 years from now or not. Actually, this worry is justified because inflation is eating away the savings of any investor. Therefore, whenever a common man invests his hard-earned money in any investment option, the first question before him is how much time will it take for this investment to double or triple? The special rules of investment savings, Rule of 72, Rule of 114 and Rule of 144 can help you in this.
PSU Funds Return: 5 schemes giving 66 to 94% return in 1 year, these mutual funds invest your money in strong government companies
Inflation is affecting savings
Currently, according to government data, inflation is rising at the rate of 4%. A few days ago, it was above 5%. If we assume 5% as the inflation rate without taking any risk, then it turns out that the work for which 1 lakh is spent today, will cost 2.5 lakh rupees after 20 years and 3 lakh rupees after 25 years. That is, if we talk about 20 years later, the value of money will decrease by about 150%. Therefore, if 20 lakh is spent on higher education today, then at least 45 to 50 lakh rupees will be needed after 20 years.
Pension Calculator: Pension will increase 3 times, give top up booster to investment in NPS, you will get benefit like SIP
What is Rule of 72 and Rule of 114
Rule of 72 and Rule of 114 are included in the special formula of investment. Experts consider Rule of 72 to be an accurate formula, through which it is decided in how many days your investment will double. Through Rule of 114, you can find out in how many days your money will triple. Through Rule of 144, you can know in how many days your money will become 4 times.
| time to double | time to become 3 times | time to become 4 times | |
| interest rate | Rule 72 | Rule 114 | Rule 144 |
| 6% | 12 years | 19 years | 24 years |
| 8% | 9 years | 14,25 years | 18 years |
| 10% | 7.2 years | 11.4 years | 14.4 years |
| 12% | 6 years | 9.5 years | 12 years |
| 15% | 4.8 years | 7.6 years | 9.6 years |
SIP Return: Top 6 schemes of Axis Mutual Fund, 30 to 40% annual return in 3 years, 6 lakhs earned from 36 SIPs of 10 thousand
How much interest is required to double the amount in 6 years
Suppose you have planned to invest Rs 5 lakh and you have to spend around Rs 10 lakh after 6 years on some work after adjusting inflation. If you want to convert Rs 5 lakh into Rs 10 lakh in 6 years, then you will have to look for a scheme which is giving or is expected to give a return of 12 percent per annum (72/12% = 6 years). Talking about India, there is no such small savings or fixed income product which is giving a return of 12 percent. Therefore, you can look for the option of equity mutual funds.
Mutual Fund Star: Tata Group’s scheme made Rs 3000 SIP into Rs 3 crore, one time investment increased 37 times
How much interest is required to triple the amount in 10 years
Suppose you have planned to invest Rs 5 lakh and you have to spend around Rs 15 lakh after 10 years on some work after adjusting inflation. If you want to convert Rs 5 lakh into Rs 15 lakh in 10 years, then you will have to look for a scheme where you are getting or are expected to get a return of around 12 percent per annum (114/12% = 9.5 years). Talking about India, there is no such small savings or fixed income product where you are getting a return of 12 percent. Therefore, you can look for the option of equity mutual funds.
