How Soon You Can Double Your money?
hear is a simple rule that to know when your investment will get doubled and that is Rule of 72
Rule of 72
The rule of 72 is a famous shortcut for calculating how long it will take for an investment to double if its growth compounds.Just divide 72 by your expected annual rate of return. The result is the number of years it will take to double your money.
Ok lets understand with an example
Lets assume Person XYZ has invested Rs. 10,000/- and he is expecting a rate of return of around 10% annually then,
72/10 = 7.2 Years is the time that is required to double your money. after 7.2 years person XYZ will have Rs. 20,000 in his investment corpus.
The rule of 72 helps Investors to know which investment is better with respect to time, if you are investing in a bank Fixed deposits then your investment will grow with a rate of 5.5% (banks interest rate keeps on changing), then you will have to wait 13 long years to double your money (72/5.5 = 13.0).
Now a days Mutual find SIP's are performing well with average return of around 12% per year. If you have invested in mutual funds then you need to wait for only 6 years to double your money (72/12 = 6). If you want to know what is mutual funds and what is mutual Fund SIP then click below links
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